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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*
Tibor Kovač** 
Article | Year: 2022 | Pages: 43 - 81 | Volume: 46 | Issue: 1 Received: June 1, 2021 | Accepted: November 4, 2021 | Published online: March 8, 2022
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
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Variable
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Period
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Frequency
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Database
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Description
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Gross domestic product at market prices
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1999Q1-2020Q4
(Malta from 2000)
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Quarterly
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Eurostat
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Unite=chain linked volumes, index 2015=100, seasonally and calendar
adjusted data
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Unemployment rate
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1999Q1-2020Q4
(Bulgaria from 2000; France from 2003)
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Quarterly
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Eurostat
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Unite=percentage of population in the labor force, sex=total, trend
cycle data
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Working age population
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2000-2020
(France from 2003)
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Annual
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Eurostat
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Unite=number, sex=total
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Active (persons) population
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2000-2020
(France from 2003)
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Annual
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Eurostat
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Unite= percentage of total population, sex=total
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Output elasticity of labor
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2000-2019
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Annual
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Penn World Table (Feenstra, Inklaar and Timmer, 2015)
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Sou rce: Authors’ own calculation based on Labor force survey (LFS) unemployment data by
Eurostat (2021).
Source: Authors’ own calculation based on LFS unemployment data by Eurostat (2021) and IMF (2020).
Source: Authors’ own calculation based on LFS unemployment data by Eurostat (2021) and Penn World Table (Feenstra, Inklaar and Timmer, 2015).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by
Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
Source: Authors’ own calculation based on Labor force survey (LFS) unemployment data by Eurostat (2021).
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Country
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Fiscal measures (excluding health
care system)
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Austria
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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
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Belgium
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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
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Bulgaria
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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
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Croatia
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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
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Cyprus
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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
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Czechia
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Wage subsidy; tax
deferral/reduction; compensatory bonus for self-employed persons and small
Ltd; public guarantees; grants for tourism
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Denmark
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Measures to support workers and
businesses affected by the COVID-19 crisis. Temporary liquidity measures;
deferral of tax payments; government guarantees
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Estonia
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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
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Finland
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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
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France
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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
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Germany
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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
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Greece
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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
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Hungary
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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
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Ireland
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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
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Italy
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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
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Latvia
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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.
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Lithuania
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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
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Malta
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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
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Netherlands
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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
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Poland
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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
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Portugal
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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
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Romania
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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
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Slovakia
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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
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Slovenia
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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
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Spain
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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
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Sweden
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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
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Source: IMF (2021).
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March, 2022
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