吉林快3大小单双微信群

The UK's furloughed workers: Who, why, what next?

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Tim Phillips 

                           Nine million jobs have been furloughed in the UK, during the coronavirus pandemic.

Who was doing those jobs and what happens to them now? Abi Adams-Prassl at Oxford University has been looking at the data.

Abi, welcome.

Abi Adams-Prassl

              Hi, Tim.

Tim Phillips     

              Now refresh our memory. What is the Coronavirus Job Retention Scheme in the UK?

How does it work?

Abi Adams-Prassl                

So the Coronavirus Job Retention Scheme, otherwise just referred to as the Furloughing Scheme is an emergency short-time work policy. It allows employers to cut their workers' hours with the government, stepping into top-up the paying of salaries. And really what it's aiming to do is keep worker and firm matches together through the pandemic rather than having firms just temporarily lay off employees. Now, when it was first introduced, furloughed workers, weren't allowed to do any work for their employer. And in return, the government would pay 80% of workers salary up to two and a half thousand pounds a month.

Tim Phillips                           

And how does the UK compare to other countries in its furlough scheme?

Abi Adams-Prassl                

So I think there are really two big differences with the likes of a more established European short-time work scheme. The first was that initially in the UK scheme, there were really big restrictions on what work and furloughed employees could do. So actually until July, workers on the scheme have had to do no work for their employer at all, whilst furloughed. Now this is in pretty big contrast to other short-time work schemes in Italy and France and Germany, which allow for much more flexible reductions in hours and for people to work part-time while still having government subsidies for the wage. And in principle, this seems like a much better idea because it allows firms to more easily keep their businesses going and also to stop any depreciation of human capital, and keep workers actually involved in the firm.

The other big difference is about the timing of this scheme and how it applies across different types of sectors and different firms. So the UK scheme is a blanket policy, which applies with the same parameters across all different sectors. And it's set to end everywhere in the economy in October. Now this again, is in contrast to other schemes, which allow for firms to apply for assistance normally for up to around a year. So this is shorter. And the other thing is that because the UK scheme has been dreamt up, if you like, in response to the pandemic, there's been a lot of uncertainty about the length of the scheme who it's going to apply to. Are there going to be changes in the generosity, which again, there's been much more certainty. I think in the running of these more established schemes through the crisis.

Tim Phillips                           

Now Abi, you've done some analysis on how the UK scheme's working, but it's literally going on right now – so where do you get your data from?

Abi Adams-Prassl                

With my colleagues, we've been running real-time labour market surveys since the beginning of the crisis. Our first one was run in the UK two days after lockdown started, right at the end of March, and then we've run more surveys in April and May and we're going to be running our next set of surveys probably in September or October when the furloughing scheme is going to be coming to the end in the UK. And we'd initially thought we would be moving into more of a recovery period at that time. But anyway, we'll see how that goes.

Tim Phillips                           

So let's look at some of the things you found out. First of all, who was furloughed, who was more likely to be furloughed?

Abi Adams-Prassl                

Perhaps unsurprisingly workers who can't do a lot of their work from 吉林快3大小单双微信群 have been more likely to be furloughed. And those in times of shut down the sectors, I think more surprisingly for us, the different characteristics of workers who have been furloughed, even when you control for different aspects of the jobs that they're doing. What we've found is that, which I found particularly striking, is that women have been significantly more likely to be furloughed the men doing the same type of job. And what we're finding is that there's evidence that differences in childcare responsibility have been playing an important role in this. What we found is that mothers have been much more likely to ask to be furloughed by their employers as opposed to fathers. And that this is even when we control for a really rich set of job characteristics – but correspondingly, we don't find any gender gap in the decision to ask to be furloughed amongst childless workers.

Tim Phillips                           

That's very interesting. And that now also we've got the government paying 80% of the salary, are the employers topping up the other 20%?

Abi Adams-Prassl                

We're finding that the majority of workers are reporting that their employers as topping them up. So about 70% of furloughed workers in our surveys said that they're receiving this discretionary top up from their employer. However, that 70% isn't equal across all types of jobs or all types of workers. What we found is that workers on higher incomes are much more likely to have been topped up, which reduces this inequality if you like, reducing effect of the scheme. And we also find that women have also been less likely to have their salaries topped up beyond the 80%. Now this is partially explained, however, because of these differences in the types of jobs that women do.

Tim Phillips                           

That you also pointed out that you're not meant to be working when you were furloughed, from your evidence, did people stick to this?

Abi Adams-Prassl                

Oh, the evidence would suggest not. What we find is that, so our surveys were occurring when you weren't supposed to be doing any work at all on furlough. And we found that the majority of workers said that they at least continued to do some work whilst furloughed. So about 60% of furloughed workers said that they had done at least had worked positive hours. And now this again is mainly concentrated amongst those who can do a lot of their work from 吉林快3大小单双微信群 and especially men.

So for people who said they could do at least half of their job from 吉林快3大小单双微信群 only about 20% of them report doing zero hours. And I mean, in terms of the interpretation of this, I think it's tricky because actually if people could work from 吉林快3大小单双微信群 whilst furloughed, actually it seems like potentially a good thing in terms of the overall output and activity in the economy that they were continuing to do some work whilst furloughed, rather than doing absolutely nothing at all. I think one of the key issues we see with this is that it's introducing some inequity between complying firms and noncomplying firms. And that might not be the dimension on which the government might want to be subsidising different types of employers.

Tim Phillips                           

We're reaching the end of the scheme. Now it's being wound down, at least as we know at the moment, it's intended to be wound down. What do we know from the people you surveyed about who doesn't really want to go back to the office or who is expecting not to be invited back to the office at all?

Abi Adams-Prassl                

Yeah. We asked people, who were currently furloughed still, would they prefer to return to work even at 80% of pay. And we found that 60% of people said they would want to return from work. Again, though we see big differences across occupations. Workers actually in food preparation, in sales are much less likely to be willing to return to work than those who say are in doing computer, mathematical, architectural occupations, which again, I think creates this tension with the type of, ‘get back on the high street’ type message that the government is putting out quite strongly at the moment. The other thing that we found really striking was that employees who don't have access to paid sick leave beyond the statutory minimum provided by the government are significantly less likely to want to return to work.

And we think this really highlights this important trade-off between health risks and economic risks. Workers in the UK who don't have an adequate safety net if they get sick, appear to be much more cautious about exposing themselves to health risks at work, by actually moving back into the workplace. Which seems natural.

We asked as well, what do people think about their likelihood of losing their job before August? Because we were asking earlier in the pandemic. We find that furloughed workers are much more pessimistic – 15 percentage points more pessimistic of thinking about losing their job – than non-furloughed workers, and that's especially amongst, when we control for all the aspects of the jobs that these people are doing. It's especially furloughed workers who say they could actually do a lot of their job from 吉林快3大小单双微信群 who are pretty pessimistic about keeping their job long term. And again, I think that this makes sense. For these workers, it seems less likely that social distancing measures are the primary reason that they might be on furlough because they can do that work from 吉林快3大小单双微信群. And so it might be something more about the type of firm they're in or the type of sector they're in. And so for these workers who can do their job from 吉林快3大小单双微信群, actually potentially they shouldn't be prevented through the furlough scheme of moving to more viable matches.

Tim Phillips                           

Abi, can we learn anything from this that will be useful in future the next time that we have to do short-time work in the UK?

Abi Adams-Prassl                

So I think the first thing is that really short-time work schemes should allow for part- time work. And the fact that the UK scheme initially ruled this out was really quite perverse because this flexibility to allow people to keep working is one key reason to prefer a short-time work scheme over some recall or temporary unemployment. And the fact that very few people could do zero of their jobs from 吉林快3大小单双微信群. I think it would have been better all-round if people had been encouraged to work from 吉林快3大小单双微信群 earlier in the pandemic, both in terms of the output losses, but also in terms of encouraging workers and firms to make investments in the ability to work from 吉林快3大小单双微信群. And so what we've seen in the UK is quite uneven growth across different occupations in workers’ reported ability to work from 吉林快3大小单双微信群.

And again, I think this makes sense. If people are furloughed and aren't working from 吉林快3大小单双微信群, why would firms try and use the time in that pandemic to actually invest in new technologies, invest in new ways of working to facilitate working in a more compatible way with all the pandemic restrictions? The other thing is about the timings of these schemes. And here there's a real tension in short-time work scheme, because you want to provide support for long enough to actually prevent those inefficient layoffs from the temporary hardships. But what you don't want to do is subsidise bad matches indefinitely and prevent reallocation and the economy adapting to whatever new normal we're in. What we're seeing is that really these schemes should be flexible in terms of how they're applied across different sectors, rather than this blanket policy that we currently have in the UK.

And the other thing which I think our results point to is potentially the relationship between the ending of furloughing and some sensitivity to what's going on with schooling and childcare. So the fact that women have been more likely to ask to be furloughed really suggests that there could be a risk that women, mothers could end up getting forced out of the labour market if the furloughing scheme ends whilst there's severe disruption still in schooling.

And then the final things – I know I'm going on! – is actually not really about short-time work schemes, but about a public safety net in terms of provision of sick pay. So us finding that workers without sick pay are much less likely to want to return from furlough would suggest again, that that needs to be more done potentially to support and ensure workers who are exposing themselves to catching the virus, to provide them some insurance for that. On the other hand, what we also find is that workers who haven't been furloughed during the pandemic, they're much more likely to have said that they had kept working, even if they were showing signs of coronavirus symptoms. What you want to do is have a social security system which means that people who can work and feel safe, but also those who are sick are also incentivised not to go out into the workplace, and stay at 吉林快3大小单双微信群.

Tim Phillips                           

You're definitely not going on. This is great information Abi. Thank you very much. You have certainly been working from 吉林快3大小单双微信群.

Abi Adams-Prassl                

Yes indeed. Thank you so much, Tim.

          Tim Phillips         Thank you. Bye bye.

Topics:  Covid-19 Labour markets

Tags:  COVID-19, furlough, UK labour market

Associate Professor in Economics, University of Oxford; Research Fellow, Institute for Fiscal Studies

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