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SAMØKONOMI-Makroøkonomiske utfordringer

Employment, investment, and inequality in the aftermath of the Covid-19 crisis

Alternative title: Employment, investment, and inequality in the aftermath of the Covid-19 crisis

Awarded: NOK 12.0 mill.

Project Number:

315769

Application Type:

Project Period:

2021 - 2026

Location:

Partner countries:

We will study various aspects of the Covid-19 induced economic crisis, an in particular its long-term effects on individuals and firms. We will relate this to the ownership structure in firms, business cycles, as well as to who benefits and who looses from the covid-crisis. The ambition is to use different identification strategies and conduct causal analysis that can tell us something of the causes and effects of the economic crisis in general and what this means for policy design going forward.

We plan to exploit the impact of the crisis to analyze how the economy actually works by utilizing rich administrative micro data as well as survey data. By combining frontline methodological advances with detailed data from various sources and several countries we will provide novel insights into core economic, political and societal research questions. We have already provided detailed insights into the nature of the first six weeks of the Covid-19 crisis in Norway in a previous project (Alstadsæter et al, 2020), documenting that the effects of social distancing measures quickly spread to industries that were not directly affected by policy. We also found that the shock had a strong socio-economic gradient, hit a financially vulnerable population, and parents with younger children, and was driven by layoffs in smaller, less productive, and financially weaker firms. In the current project, we build on our previous results and utilize very detailed Norwegian administrative data covering the universe of Norwegian firms and individuals for the period 1993-2018 and onwards to bring new insights on incentives and behavior and how job loss may foster entrepreneurship. In a novel sub-project, we will study the anatomy of firms’ investments, job creation, and innovation in an European setting by combining survey og register data in Norway, Denmark, and Germany in order to facilitate cross-country comparisons. We also study how the crisis affects migration patterns and what the consequences for the Norwegian labor market are. Finally, we will build on our previous results and investigate longer term impact on inequality, as well as delving into the question and developing a new methodology to analyze the effects of a wealth tax on value creation.

Publications from Cristin

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Funding scheme:

SAMØKONOMI-Makroøkonomiske utfordringer