The effectiveness of the fiscal policy response to COVID-19 through the lens of short and long run labor market effects of COVID-19 measures*

Variable

Period

Frequency

Database

Description

Gross domestic product at market prices

1999Q1-2020Q4
(Malta from 2000)

Quarterly

Eurostat

Unite=chain linked volumes, index 2015=100, seasonally and calendar adjusted data

Unemployment rate

1999Q1-2020Q4
(Bulgaria from 2000; France from 2003)

Quarterly

Eurostat

Unite=percentage of population in the labor force, sex=total, trend cycle data

Working age population

2000-2020
(France from 2003)

Annual

Eurostat

Unite=number, sex=total

Active (persons) population

2000-2020
(France from 2003)

Annual

Eurostat

Unite= percentage of total population, sex=total

Output elasticity of labor

2000-2019

Annual

Penn World Table (Feenstra, Inklaar and Timmer, 2015)

Country

Fiscal measures (excluding health care system)

Austria

Short-term work arrangement; liquidity support for firms; public loan guarantees; deferral/reduction of taxes; deferral of social security contributions; government investments to boost the economy

Belgium

Support for temporary unemployed and self-employed; liquidity support; deferral of social security and tax payments; solvency support; support to affected firms/households by subnational governments; a scheme for short-term trade credit insurance

Bulgaria

60/40 wage subsidy scheme; support for artists; tourism support; agricultural producers support; tax relief; bonuses to pensions and minimum pension increase; bonuses to pensions and minimum pension increase; active labor market policies; increased unemployment benefits; "Keep Me"/ "Employment for you" program; support for workplaces in the hotel and restaurant sector

Croatia

Deferment of public obligations; deferral of selected parafiscal charges; interest-free loans to local governments; subsidization of net minimum; early refund of taxes for individuals; tax obligations of companies reduced/written off; short-time work program

Cyprus

Income support for households; wage subsidy; grants to small businesses and self-employed; support for the tourism sector; tax deferral/reduction; interest subsidy for new business and housing loans; guarantees; supported loans to SMEs

Czechia

Wage subsidy; tax deferral/reduction; compensatory bonus for self-employed persons and small Ltd; public guarantees; grants for tourism

Denmark

Measures to support workers and businesses affected by the COVID-19 crisis. Temporary liquidity measures; deferral of tax payments; government guarantees

Estonia

Cover for wage reduction; business loans to rural companies; guarantees/collateral for bank loans; business loans for liquidity support to companies; support to local authorities; investment loans to companies; compensation for direct costs of canceled cultural and sporting events

Finland

Lower pension contributions; grants to SMEs and self-employed; expanded parental allowance, social assistance, and unemployment insurance; deferral of tax and pension payments; recapitalization scheme for state-owned companies; supporting restaurant and catering businesses; guarantees for the Employment Fund, SURE, and the EIB; support to households/businesses; increased public investment; temporary loosening of unemployment insurance benefit eligibility

France

Public guarantees; liquidity support; deferral of social security and tax payments; accelerated refund of tax credits; support for wages under the short-time work scheme; direct financial support for affected microenterprises; deferral of rent and utility payments for affected microenterprises/SMEs; additional investments; nationalizations of companies in difficulty; facilitating granting of exceptional bonuses; extension of unemployment benefits; support for the hardest-hit sectors

Germany

Short-term work subsidy; expanded childcare benefits; easier access to basic income support for the self-employed; grants to small business owners and self-employed persons; interest-free tax deferrals; venture capital funding for start-ups; temporarily expanded duration of unemployment insurance and parental leave benefits; temporary VAT reduction; grants for hardest-hit SME’s; financial support for local governments, credit guarantees for exporters and export-financing banks

Greece

Temporary transfers to vulnerable individuals; transfer for employees working in hard-hit firms and for self-employed professionals; extension of unemployment benefits; support for short-term employment, subsidies to household’s loans; liquidity support to hard-hit businesses through loan guarantees, loan and interest payment subsidies, refundable advance payment, rent reductions, and deferred payments of taxes/social security contributions

Hungary

Employers' social contributions lifted; tax deferral; cancel of tourism development contributions; tax relief for media; subsidizing wages for shortened work hours; job creation by supporting investments; support for priority sectors; provision of interest-subsidized and guaranteed credit facilities

Ireland

Employment wage support scheme: unemployment payment available to those who have lost employment due pandemic; compensation payments to the affected firms; investment in training, education, skills development, work placement schemes, recruitment subsidies, job search, and assistance measures; grants for enterprises; waiver of commercial rates; reducing the lending rate for micro and small businesses; support to tourism and culture sector; tax deferral/reduction

Italy

Measures to preserve jobs and support income of laid-off workers and self-employed; measures to support businesses; tax deferrals; postponement of utility bill payments; measures to support credit supply; state guarantees; measures to support businesses, including grants for SMEs

Latvia

Loans and guarantees to affected businesses; sectoral support packages; use of EU funds to mitigate the impact of the crisis; revenue measures; expenditure measures supporting idle workers and social benefits; investment funds established to support affected large enterprises.

Lithuania

Additional funds for support for the self-employed; wage subsidies; co-financing of climate change investment projects; guarantees for agricultural as well as SME loans; increased the borrowing; interest compensation support for SMEs with deferred loans; a new financial instrument for businesses to form portfolios from business loans; cheap loans targeted to hard-hit sectors; launching business support fund; job search allowances; an increase in social benefits; additional funds for the self-employed and for vocational training; an increase in unemployment benefits

Malta

Support individuals unable to work from home; special unemployment benefits; wage subsidies for businesses and self-employed individuals; support for businesses to cover costs of quarantined employees; rent subsidy scheme for SMEs; tax deferral/reduction; in-work benefit and grants

Netherlands

Compensation of labor costs for companies; compensation for affected sectors; support for entrepreneurs and self-employed, start-ups and small innovation companies; scaling up of the short-time working scheme; allowances for SMEs to help them finance their fixed costs; deferral of tax; public guarantee schemes

Poland

Wage subsidies for employees of affected businesses and self-employed; increased guarantees for enterprises; loans for micro-firms; postponement /cancellation of social insurance contributions; deduction of 2020’s losses for 2021 tax settlement; an allowance for parents of young children related to school closures; solidarity benefit for those who lost job due to crisis; an increase in the unemployment benefit; tourism voucher; interest rate subsidies; support for public investment; liquidity loans and subsidies for micro, small/medium, and large enterprises

Portugal

Financial support for those temporarily furloughed by their employer; financial incentives to support the progressive reopening and to normalize business activity; state-guaranteed credit lines for medium, small and micro enterprises; tax/social security contribution deferrals; financial support for the self-employed; support to the national airline

Romania

Covering partially the wages of parents staying home due to school closure; covering in part the wages of self-employed and workers in danger of being laid off; bonus for corporate income tax payments; deferral of utility payments for SMEs; grants for the businesses; tax deferral/reduction

Slovakia

Wage compensation for affected businesses and self-employed, and subsidies to individuals without income; enhanced unemployment benefits; deferral and waiver of employers' social security contributions; tax deferral; rental subsidies

Slovenia

Tax deferrals; wage subsidies; support to household income; support to corporate liquidity through grants, equity purchase, and government guarantees and credit lines; subsidies for shortened work time; vouchers for tourism

Spain

Unemployment benefit for workers temporarily laid off; direct aid for solvency support; tax deferral and reduction; benefit for self-employed workers; assistance programs for vulnerable renters; strengthened unemployment protection; subsidy for vehicle renewal; investment in digitization and innovation in the tourism; benefits for workers who have exhausted unemployment benefits; extension of unemployment benefit to cover workers laid off during the probation period; a temporary monthly allowance for temporary workers; a temporary subsidy for household employees affected by COVID-19; financial assistance to the education system; exemptions of social contributions for impacted companies that maintain employment; deferral of social security debts for companies/self-employed; moratoria of social security contributions for the self-employed and companies in selected industries

Sweden

Liquidity support and guarantees; additional expenditures on wage subsidies for short-term leave, temporary payment of sick leave; loans to SMEs; temporary rent subsidies to vulnerable sectors; temporarily increase of unemployment benefits; expanded active labor market policies; expansion of education, initiatives for green jobs and summer jobs for young people; temporary reduction of employers’ social security contributions; grants to municipalities and regions; temporary grants to businesses to cover their fixed costs; support to regional public transport, deferral of taxes/social contributions; credit guarantees for Swedish airlines, state credit guarantees for loans to companies; guarantees to the EU for loans to member states, SURE, and to the European Investment Bank for a guarantee fund to support companies