August 2022

IZA DP No. 15475: Disparities in Labour Market and Income Trends during the First Year of the COVID-19 Crisis – Evidence from Germany

Carsten Braband, Valentina Sara Consiglio, Markus M. Grabka, Natascha Hainbach, Sebastian Königs

This paper studies inequalities in labour market outcomes, incomes and economic concerns across workers in Germany during the first year of the COVID-19 crisis using SOEP-CoV data. It shows that, overall, the self-employed and disadvantaged groups of workers were more severely affected by the crisis, including part-time workers and workers in marginal employment (Minijobs), low-educated and low-income workers, and to some extent women. Short-time work (Kurzarbeit), one of the central pillars of Germany's policy response to the crisis, prevented a further widening of labour market inequalities. In spite of the widespread use of Kurzarbeit, about one-in-five low-income workers who had been employed in 2019 were out of work in January/February 2021. This reflects that a higher share of low-income workers had been on part-time contracts and in Minijobs, and had lower capacity to work from home.