Long Covid in the labour market

The impact on the labour market of Covid-19 a year into the crisis, and how to secure a strong recovery

This is the third time we have written a report taking stock of the impact of the virus on the labour market.

Nine months on from our first report in June last year, some things are similar. The health effects of the second wave may be starting to recede, and thoughts are again turning to recovery.

But in two important respects, the situation now is different from June 2020. First, the rollout of the vaccine means we can be more confident that this will be a recovery that lasts. This strengthens the case for protecting jobs and firms through to the end of the crisis. Secondly, and crucially, the crisis has been going on for much longer. While, as we show, the groups affected at each stage of this crisis have been similar, the duration of the hit for many workers qualitatively changes its impact.

This paper therefore has two tasks. First, we examine the impact of the third lockdown on the labour market. Official labour market data is published with a lag. To take stock of the January lockdown, we therefore draw on a newly-commissioned, representative survey of UK adults, which was in the field from 22-26 January. This is the third time we have commissioned such a survey, following previous rounds in May and September last year.

Second, we ask what the crisis having dragged on for almost a whole year means for its effects. We also make recommendations for the future path of policy, both to address those effects and to successfully phase out support as the economy reopens.