Drivers of Working Hours and Household Income Dynamics During the Covid-19 Pandemic: The Case of the Netherlands
59 Pages Posted: 29 May 2021 Last revised: 19 May 2022
Using customized panel data spanning the entire year of 2020, we analyze the dynamics of working hours and household income across different stages of the CoVid-19 pandemic. Similar to many other countries, during this period the Netherlands experienced a quick spread of the SARS-CoV-2 virus, adopted a set of fairly strict social distancing measures, gradually reopened, and imposed another lockdown to contain the second wave. We show that socio-economic status is strongly related to changes in working hours, especially when strict economic restrictions are in place. In contrast, household income is equally unaffected for all socio-economic groups. Examining the drivers of these observations, we find that pandemic-specific job characteristics (the ability to work from home and essential worker status) explain most of the socio-economic gradient in total working hours. Furthermore, household income is largely decoupled from shocks to working hours for employees. We provide suggestive evidence that large-scale labor hoarding schemes have helped insure employees against demand shocks to their employees.
Keywords: inequality, labor market, working from home, coronavirus, mitigation policies, essential workers, COVID-19
JEL Classification: D31, J21, J22, J24, J33
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