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Labor market effects of COVID-19 shocks

Michael Frenkel

Michael Frenkel

WHU – Otto Beisheim School of ManagementVallendar, Germany
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Frenkel, Michael
, 
Georg Stadtmann

Georg Stadtmann

European University Viadrina, Frankfurt (Oder), University of Southern DenmarkOdense M,
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Stadtmann, Georg
 and 
Lilli Zimmermann

Lilli Zimmermann

Deutsche Bundesbank, University of Applied SciencesHachenburg, Germany
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Zimmermann, Lilli
  
Mar 31, 2023
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Article Category: Conceptual Paper
Published Online: Mar 31, 2023
Page range: 3 - 12
Received: Jun 08, 2022
Accepted: Dec 14, 2022
DOI: https://doi.org/10.2478/ijme-2023-0001
Keywords
© 2023 Michael Frenkel et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1.

An increase in the mark-up.
An increase in the mark-up.

Figure 2.

A decline in labor productivity.
A decline in labor productivity.

Figure 3.

An increase in the reservation wage.
An increase in the reservation wage.

Baseline scenario and shocks

Base μ↑ A↓ z↑
z 1.8 1.8 1.8 1.9
μ 0.25 1/3 0.25 0.25
A 2 2 1.875 2
A/(1 + μ) 1.60 1.50 1.50 1.60
W/P 1.60 1.50 1.50 1.60
un = z - A/(1 + μ) 0.20 0.30 0.30 0.30
L 1,250 1,250 1,250 1,250
Nn = L(1 - Un) 1,000 875 875 875
Yn = A·Nn 2,000 1,750 1,641 1,750

Empirical evidence

Germany Poland UK US OECD total
Unit labor Pre-pandemic 107.5 109.2 108.4 106.4 106.6
Costs1 Pandemic 113.8 119.7 122.3 114.5 114.0
Unemployment Pre-pandemic     3.1     3.6     4.0     3.8     5.5
rate Pandemic     3.6     3.3     4.5     6.7     6.7
Labor force1 Pre-pandemic   61.6   56.3   63.9   63.0   60.8
Pandemic   61.1   56.7   63.4   61.7   59.6
GDP1,2 Pre-pandemic 106.7 116.6 106.3 108.2 108.0
Pandemic 104.3 120.2   98.9 109.6 107.0
Language:
English
Publication timeframe:
4 times per year
Journal Subjects:
Business and Economics, Political Economics, Economic Theory, Systems and Structures, Business Management, Management Accounting, Financial Controlling, Cost Calculation, Investment
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