Modelling the Differing Impacts of Covid-19 in the UK Labour Market†

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Abstract

This article studies the impact of the Covid-19 pandemic on graduates and non-graduates in the United Kingdom. We construct a DSGE model with search frictions that is designed around key features of the UK labour market and simulate the model using an array of shocks, designed to mimic the impact of the Covid-19 pandemic. We show that our relatively simple macroeconomic model can describe the impact of the pandemic on output, employment and wages. Our results show that the impact of the pandemic on employment and wages was more severe for non-graduates than for graduates, and that up to 5 million jobs would have been lost in the first wave of the pandemic in the absence of the Job Retention Scheme.

Original languageEnglish
Pages (from-to)994-1017
Number of pages24
JournalOxford Bulletin of Economics and Statistics
Volume84
Issue number5
Early online date18 Apr 2022
DOIs
Publication statusPublished - 31 Oct 2022

ASJC Scopus subject areas

  • Statistics and Probability
  • Social Sciences (miscellaneous)
  • Economics and Econometrics
  • Statistics, Probability and Uncertainty

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