The corona pandemic is hitting the working life hard. Many are temporary laid-off or have lost their jobs. Businesses are struggling financially. Authorities have undertaken measures to counteract these negative effects, but the crisis may have a lasting impact on the labor market, and the consequent policy response. Within 2025, Fafo, in collaboration with leading researchers from the University of Gothenburg and the University of Aalborg, will conduct interdisciplinary and comparative studies across Scandinavia on the labour market impact of the crisis.
Several questions will be investigated: Which groups lose their jobs and bear the brunt, and will they find stable employment and good income in following years? Are wages equally sensitive to crises and to upturns? Are wage cuts in bad times just as common for both collectively and individually negotiated wages?
How is the labor market restructured? Authorities, employer and employee organizations have in previous crises jointly found solutions that ensured coordination between different policy areas–wage negotiations, fiscal policy, income security, labor market measures, and competence policy- have been handled in a unified context. Are institutional actors, despite varying degrees of cooperation before the crisis, able to create sound solutions under great pressure?
We will also study how the crisis affects institutions and regulations in the labour market. Will current regulation of dismissal protection, unemployment benefits and temporary lay-offs change, and if so, why and how? Will new rules and benefits appear? How will social partners adjust to a new and changed regulative landscape when the acute crisis subsides?
Finally, we will study how the crisis affects individuals’ attitudes towards employment protection, temporary lay-off schemes, and unemployment benefits. How attitudes and institutions interact, possibly influencing whether new measures and instruments become permanent, will also be studied.
Cooperating with researchers at the universities of Gothenburg and Aalborg, we will compare how the Danish, Norwegian and Swedish labour markets and their governance models tackle and adjust to the consequences of the corona epidemic. Applying a multi-level, multi-method approach, we compare the crisis’ impact, and the policy responses and adjustments to it as it unfolds in time. Scandinavian labour market institutions and actors share many similarities, but regulations differ in important ways as do the national responses to the epidemic. Combining register and survey data, document analyses and qualitative interviews, the project builds on five work packages (WP). The core questions in WP1 and WP2 are how the economic shock affects the pattern of labour mobility, wage sensitivities, and the distribution of employment and earnings. WP3 examines to what extent the Scandinavian capacity for crisis management through coordination of economic policies, wage setting and social policies remains intact, and the role of social dialogue in shaping eventual reforms in labour market policies and institutions. WP4 analyses changes in specific policy instruments and institutions, such as temporary lay-off schemes and employment regulation, and how the adjustment paths are influenced by national differences in the depth of the crisis or the extent of policy concertation. Finally, WP5 studies attitudes and preferences of individuals in different labour market positions, their support for or disapproval of different policy schemes and changes. A research challenge could be the access to central representatives of governments and organized actors in WP3-4, but the research team has longstanding experience in research cooperation with such actors. WP5 requires information from surveys that, provided national funding in Denmark and Sweden, require coordination across countries, but researchers involved in this project have extensive experience with this type of data collections.