Working Paper: CEPR ID: DP16755
Authors: Jennifer Hunt; Jeff Borland
Abstract: We analyze the JobKeeper lump-sum wage subsidy introduced by the Australian government in response to the COVID-19 pandemic, paying particular attention to the role of temporary layoffs in saving jobs. Although temporary layoffs were widely used, we find that recalls of workers on temporary layoff played only a small role in the early recovery. Of approximately 300,000 temporarily laid off, only about 100,000 were recalled in the initial months of recovery. In this time total employment grew by 440,000, reversing one-half of losses from the first months of the pandemic. This suggests either that temporary layoffs were very long, or that many workers on temporary layoffs were never recalled.
Keywords: wage subsidy; temporary layoffs; JobKeeper; COVID-19
JEL Codes: J08; J20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| JobKeeper program (E63) | temporary layoffs (J63) |
| temporary layoffs (J63) | employment declines (J63) |
| JobKeeper program (E63) | employer-employee connections (M51) |
| employer-employee connections (M51) | dampening the employment cycle (J68) |
| JobKeeper program (E63) | jobs saved (J68) |
| temporary layoffs (J63) | recalls (D18) |