
European labour market dynamics after the outbreak of the Covid-19 crisis
In order to analyse the mechanisms behind the dropping employment figures, this article gives an outline of developments in labour market flow…

The Covid-19 pandemic has triggered the worst economic crisis since World War II. In order to contain the spread of new infections, to save lives, and to avoid overburdening of the healthcare system, Germany and many other countries drastically powered down numerous areas of public life for a while. Some economic sectors, especially the hotel and catering industry or stationary retail trade (without the food segment), were hit in particular.
Even though the economy and the labour market are gradually recovering, the development of the pandemic situation remains very dynamic. Measures are currently being largely relaxed worldwide, however, repeated outbreaks can potentially lead to tougher restrictions once again. The companies that were directly affected by the lockdown measures are still facing a threat to their existence more often. Some occupational groups, too, have reasons to fear unemployment as a direct or indirect consequence of the Covid-19 crisis. Parents and children may still face restrictions in childcare and schooling, for instance due to illness-related absences or quarantine. This also applies to the situation at universities.
The challenges associated with the Covid-19 pandemic have led to an immense short-term demand for information in politics and practice. Up-to-date survey data offering insights into the way economy and society are dealing with the restrictions have always been and still are the only means to satisfy this demand. For Germany, this means that the IAB’s long-standing expertise in the design and implementation of new data products is called for.
Within the shortest time, the IAB has expanded its ongoing surveys and introduced new ones in order to promptly understand the effects of the coronavirus crisis on both households and establishments (see info boxes 1 “Existing coronavirus-related IAB surveys” and 2 “New coronavirus-related IAB surveys”). First, these data were partly made available to the research community via the IAB’s Research Data Centre (see info box 3 “Surveys accessible via the Research Data Centre”). Second, those interviewed were often asked to give their consent to linking the survey data with the administrative data. In that case, the respondents’ employment histories during the pandemic as well as the employment structures of establishments can be observed over a longer period, too. The datasets presented here are also largely suitable for evaluating the long-term effects of the crisis.
At the beginning of the pandemic, no survey data were available to the IAB that would cover both the situation of the establishments prior to the lockdown in March 2020 and that during the further development of the pandemic. For this reason, follow-up telephone interviews were added to the “IAB Job Vacancy Survey”, a quarterly establishment survey. That made it possible to collect information on job vacancies and on the operational handling of the Covid-19 crisis over the entire period.
The “IAB Establishment Panel”, an annual representative establishment survey of the IAB, has been expanded, too. The newly introduced questions cover the consequences of the pandemic on the establishments, the extent to which they were affected, the personnel policy reactions to the pandemic, changes in the service offer or distribution channels, short-time work, and in-company vocational training as well as on further training.
A remarkable side benefit of the pandemic is the acceleration of digitalisation it triggered and its potential influence on the labour market (to find out more, please refer to the article by Lutz Bellmann and co-authors published on VOX EU in 2021 and to a contribution by Ulrich Walwei in the IAB-Forum in 2020). The survey conducted back in 2016 was therefore repeated in 2021. With its help, a more intensified use of certain digital technologies, for instance, in the areas of Industry 4.0, artificial intelligence, and robotics during the pandemic can be examined.
Additionally, the existing surveys among individuals such as the Panel Study “Labour Market and Social Security” (PASS) or the “Linked Personnel Panel” (LPP) were provided with coronavirus-related question modules. Their aim is to better analyse, for instance, the consequences of the Covid-19 pandemic for individual health and well-being as well as the division of labour within families, or even the effects on social participation or social inequality.
Some IAB surveys take a closer look at special groups of persons. As part of the long-term unemployed and long-term benefit recipients supported within the framework of the Participation Opportunities Act (Sections 16e and 16i Book Two of the German Social Code) as well as a reference group of unemployment benefit (ALG-II) recipients were questioned about their social participation, their well-being, their fear of losing their job, and their working conditions during the Covid-19 pandemic.
The survey “Job Seeking and Life Quality” is intended for employees who registered themselves as job-seekers. It provides a lot of data on the basis of a monthly survey via a smartphone app: for instance, regarding the current employment status, different indicators associated with well-being (cognitive, emotional, physical, and psychological comfort), the use of short-time work, coronavirus infection and self-isolation, and working from home, but also regarding individual concerns about their personal financial situation, their own health or that of their relatives.
The “National Educational Panel Study” (NEPS) and the survey “Career Orientation: Choice of Career and Study” (BerO) help to examine the effects of the Covid‑19 pandemic on the education and employment histories of young people, the development of youth unemployment, and the transition from school to vocational training and employment.
The study “Coronavirus and You” (CoDu) highlights the changes to the life situation of children/young people and their parents as a result of the pandemic. About 10,000 children and adolescents of different age groups and their parents are being interviewed in the context of different surveys all over Germany. The main objective of this study is to analyse the individual educational decisions of these children and to work out how the state support of families with children can be adjusted in a targeted way.
In order to understand the impact of the Covid-19 pandemic on migrants and refugees, the IAB in cooperation with its partners carried out special surveys in the spring and summer of 2020 within the framework of the “IAB-BAMF-SOEP Survey of Refugees” and the “IAB-SOEP Migration Sample”. These delivered extensive information on various changes in the employment situation, the attendance of integration courses and measures, the social and health-related situation of those interviewed, and numerous structural characteristics (e. g. the sector, establishment, and activity structure). Since these data are collected during the main survey of the following waves, too, they also enable long-term labour market analyses.
Furthermore, the IAB in cooperation with the German Institute for Economic Research (DIW), the research centre of the Federal Office for Migration and Refugees (BAMF), and the Robert Koch Institute (RKI) conducted a representative special survey in 2021, the second nationwide antibody study “Living in Germany – Corona Monitoring” (RKI-SOEP-2). In its context, the participants of the “DIW’s Socio-Economic Panel” (SOEP) were interviewed. All these persons were provided with a short questionnaire and test kits for SARS-CoV-2 virus antibody testing. That way, representative data regarding immunity against the virus were generated. These data were linked with the collected survey information as well as the longitudinal data included in the SOEP. On this basis, the influence of socio-economic factors on issues such as the risk of infection, the willingness to be vaccinated and vaccination rates, obstacles to accessing the healthcare system, and long-term consequences of a SARS-CoV-2 infection (Long Covid) can be examined. Potential effects on the employment status can also be analysed this way.
Since both the length of the questionnaires and the frequency of the established IAB surveys are naturally limited, the IAB introduced new repeated surveys conducted more often. Two most prominent examples are the establishment survey “Establishments in the Covid-19 crisis” (only in German) and the high-frequency online personal panel “Life and Work Situations in Times of Corona” (only in German).
With the establishment survey “Establishments in the Covid-19 crisis” (IAB BeCovid Study) a representative database for the demand side of the labour market has been developed since August 2020. In doing so, some 1,500 to 2,000 establishments are interviewed at an interval of only three to four weeks in order to map the manifold effects of the Covid-19 crisis in a timely manner. The findings obtained as a result regarding the issues of short-time work, vulnerability to the crisis, occupational safety and health protection, vaccination and testing offer in establishments, hiring and dismissal, or training and further training can help to better understand the impact of the Covid-19 pandemic and the effects of governmental measures on the establishments.
The IAB has additionally introduced the high-frequency online personal panel “Life and Work Situations in Times of Corona” (IAB-HOPP) (only in German). From May 2020 to March 2021, groups of persons with different employment status were interviewed every month about the changes in their social and professional lives in the course of the Covid-19 pandemic (employees subject to social security contributions, unemployed individuals, job-seekers, benefit recipients, participants in labour market policy measures, etc.). In doing this, such issues as the development of employment relationships, short-time work, social and financial security, working hours, working from home, and childcare were addressed.
The Covid-19 pandemic has led to enormous challenges in terms of the planning and execution of the IAB surveys in many respects. Among other things, it affected the development of questionnaires, the methods of data collection, the sampling procedure, the fieldwork, and the quality control (an overview is provided in the study published in 2020 by Joseph Sakshaug et al.). For example, in-person interviews were temporarily not possible. New questionnaires had to be developed partly under extreme time pressure. Each survey team conducted a comprehensive risk assessment that documented the consequences of the pandemic for data collection and the resulting data quality as well as the possible solution approaches and emergency plans.
The database created at the IAB is of great relevance to politics, especially labour market policy. This database will help to better understand and evaluate the macroeconomic development of the labour market, the effects of the pandemic on both the establishment level and the (working) life of individuals, and the influence of the governmental measures. It offers important insights to the research and expert audience and – in times of enormous uncertainty experienced by state decision-makers as a result of the coronavirus crisis – makes a substantial contribution to policy advice. Selected findings shall illustrate the significance of the created database for policy advice.
In 2021, for instance, Anja Bauer and her co-authors presented in an IAB-Forum contribution (only in German) an index for the occupation-related infection potential – the quantification of the risk of contracting the virus while practising a certain occupation. They demonstrate that the hazard of getting infected is particularly high in occupations requiring interaction with infected people (e. g. medical professions), but also close physical contact and customer contact (e. g. cleaning jobs).
Among other things, the IAB’s research results on the Covid-19 consequences for establishments and employees available by now show to which extent the establishments have expanded their working from home capacities or have permitted their staff to use this option for the first time in the course of the pandemic. However, a lot of employees fail to switch to working from home, although their activity is generally suitable for this and the technical prerequisites are met as well. Both sides are still reluctant to do so. These reservations could be partially waved away, even though in many cases only temporarily (detailed analyses of this issue are available, e. g. in a contribution by Corinna Frodermann and co-authors published in the IAB-Forum in 2021 and in an article by Nils Backhaus and co-authors published in 2021 in baua: Report brief).
In the first year of the pandemic, it was the establishments hardest hit by the crisis in particular that reduced their vocational training offer and employed fewer vocational training graduates than in the previous years. Filling vocational training positions during the crisis was additionally complicated by the decline in candidate numbers, which dominated the decline in vocational training offer in the second year of the pandemic in particular (for more details, please see the IAB Discussion Paper No. 22/2021 by Sandra Dummert and Matthias Umkehrer). Furthermore, the participation in in-company further training plummeted during the first lockdown. Although lots of establishments introduced or expanded their digital forms of learning, this failed to stop the massive drop in further training.
A study conducted by Eva Kleifgen, Duncan Roth, and Ignat Stepanok in 2021 suggests that the pandemic had in general hit export businesses not harder compared to non-exporting establishments. However, the crisis had hit the establishments exporting to countries outside the European Union and the United Kingdom particularly hard, at least at an early stage of the pandemic. These establishments generally have a more favourable liquidity base, however. At the time of the survey in November 2020, they hired personnel even more often, although they also more often applied for the “November aid packages”.
The research results of the IAB reveal that the impact of the Covid-19 crisis was especially severe for the vulnerable population groups. Although the general life satisfaction of all employed persons decreased during the first months of the pandemic, there are still some differences as demonstrated in an IAB Discussion Paper from 2021 by Gundula Zoch et al.
Women and working mothers were affected disproportionately; the same applies to short-time workers and self-employed individuals, who experienced significant income losses during the pandemic. Childless men in system-relevant jobs and those working from home experienced the least disadvantage. Fathers working from home were on average somewhat less satisfied than the mothers using this option despite the fact that mothers were often subjected to double burden due to childcare responsibilities (for a detailed analysis, please refer to a study published by Gundula Zoch and co-authors in 2021 and to an IAB-Forum interview with Claudia Globisch and Michael Oberfichtner on their only in German available IAB Brief Reports).
Despite the fact that lots of employed persons suffered income losses due to the pandemic, research results from Kerstin Bruckmeier and others reveal that it did not lead to an increase in income inequality in Germany in 2020. The economic and social resources that can help cope with the measures of pandemic containment individually, such as curfews and contact restrictions, differ depending on the group of persons. As demonstrated in a contribution by Katrin Hohmeyer and other researchers published in 2021 in the LASER Discussion Paper series, the Covid-19 crisis affects those groups in a special way which are already economically vulnerable. In particular, the basic benefits recipients are at a higher risk of social isolation. Empirical findings of Malte Sandner and other researchers published in an IZA Discussion Paper in 2021 additionally show that a massive decline in emotional well-being experienced during the pandemic has negatively influenced both the training expectations and career decisions of young people.
In a contribution published in 2021 Hans Dietrich and other researches have also pointed out that, due to the supervision and support parents had to provide in homeschooling during the first school closures, equal opportunities in the education system and on the labour market are likely to decrease even further in the long run.
The previously favourable integration process of refugees in Germany has also slowed down significantly due to the pandemic. This has been shown by Mariella Falkenhain and other researchers in an European Societies contribution from 2021. In the summer of 2020, refugees were more likely to be unemployed compared to other groups of persons. This can be attributed first of all to the necessity to interrupt or discontinue the integration courses and measures as well as training and qualification activities due to the spread of the virus.
Further results and an overview of the current research activities of the IAB regarding the effects of the Covid-19 pandemic on the labour market are available on the IAB website.
The IAB continues to conduct both the newly introduced and the additional interviews within the framework of the existing surveys partly on a reduced scale or less frequently. On the basis of these data and the administrative data available thus far, the organisation of training in times of crisis and the expectations about work organisation after the crisis are some of the issues to be examined in 2022. Another project is intended to analyse the impact of the crisis on a regional level using Germany and China as examples.
Further planned studies shall deal with the individual consequences of short-time work, imminent loss of job, working from home, limited care options for children and relatives in need of care, online schooling, or restricted (further) training possibilities. Further research will be conducted to find out which occupations include activities which can potentially be executed from home. The question as to whether recruiting problems and shortages of skilled workers in system-relevant sectors and professions have become more or perhaps less acute because of the pandemic is also on the research agenda of the IAB.
In 2022, the IAB research on the consequences of the Covid-19 pandemic will additionally deal with aspects of individual health, gender-specific role distributions in professional and family life, and the effects on social participation and social inequality. Besides, the IAB will take a close look at the effects on the education and employment histories of young people, the development of youth unemployment, and the transition from school to vocational training and employment.
The following datasets are accessible via the Research Data Centre of the Federal Employment Agency at the IAB (FDZ):
Abendroth, Anja; Anger, Silke; Boll, Christina; Carstensen, Tanja; Christoph, Bernhard; Danneck, Viktoria; Dummert, Sandra; Fevers, Lukas; Fuchs, Michaela; Globisch, Claudia; Hipp, Lena; Jacob, Marita, Knize, Veronika; Kreyenfeld, Michaela; Lott, Yvonne; Müller, Dana; Naujoks, Tabea; Sauermann, Armin; Schüller, Simone; Tobler, Lina; Volkert, Marieke (2022): Aufteilung der Sorge- und Erwerbsarbeit zwischen Frauen und Männern: In der Pandemie ändern sich Geschlechterrollen kaum. IAB- Kurzbericht No. 5.
Backhaus, Nils; Tisch, Anita; Kagerl, Christian; Pohlan, Laura (2021): Working from home in the corona crisis: What’s next? In: baua: Report brief.
Bauer, Anja; Dengler, Katharina; Matthes, Britta; Jucknewitz, Roland; Schramm, Anja (2021): Berufe und Covid-19-Pandemie: Wie hoch ist das berufsspezifische Ansteckungsrisiko? In: IAB-Forum, 21 September 2021.
Bellmann, Lutz; Bourgeon, Pauline; Gathmann, Christina; Gleiser, Patrick; Kagerl, Christian; Kleifgen, Eva; König, Corinna; Leber, Ute; Marguerit, David; Martin, Ludivine; Pohlan, Laura; Roth, Duncan; Schierholz, Malte; Stegmaier, Jens; Aminian, Armin (2021): The pandemic has boosted firm investments in digital technologies. In: VOX, 5 August 2021.
Bruckmeier, Kerstin; Peichl, Andreas; Popp, Martin; Wiemers, Jürgen; Wollmershäuser, Timo (2021): Distributional effects of macroeconomic shocks in real-time – A Novel Method Applied to the Covid-19 Crisis in Germany. In: Journal of Economic Inequality, Vol. 19, No. 3, pp. 459–487.
Dietrich, Hans; Patzina, Alexander; Lerche, Adrian (2021): Social inequality in the homeschooling efforts of German high school students during a school closing period. In: European Societies, Vol. 23, No. sup1, pp. 348–369.
Dummert, Sandra; Umkehrer, Matthias (2021): The Short-Run Effects of the Covid-19 Pandemic on Vocational Education in Germany. IAB-Discussion Paper No. 22.
Falkenhain, Mariella; Flick, Uwe; Hirseland, Andreas; Naji, Shahed; Seidelsohn, Kristina; Verlage, Thomas (2021): Setback in labour market integration due to the Covid-19 crisis? * An explorative insight on forced migrants’ vulnerability in Germany. In: European Societies, Vol. 23, No. sup1, pp. 448–463.
Frodermann, Corinna; Grunau, Philipp; Müller, Dana; Haas, Georg-Christoph (2021): Working from home during the Covid-19 pandemic: usage, barriers, and wishes for the future (Series “Covid-19 Crisis: Consequences for the Labour Market”). In: IAB-Forum, 30 July 2021.
Hohmeyer, Katrin; Dengler, Katharina; Knize, Veronika; Pongratz, Tamara (2021): Welfare benefit recipients in Germany: Unemployment dynamics during the Covid-19 pandemic. (LASER Discussion Papers, 132), Erlangen, 30 pp.
Illing, Hannah; Oberfichtner, Michael; Pestel, Nico; Schmieder, Johannes; Trenkle, Simon (2022): Geschlechtsspezifische Arbeitsmarktwirkung der Covid-19-Pandemie: Ähnlicher Arbeitszeitausfall, aber bei Müttern höhere zusätzliche Belastung durch Kinderbetreuung. In: IAB-Kurzbericht No. 3.
Sakshaug, Joseph; Beste, Jonas; Coban, Mustafa; Fendel, Tanja; Haas, Georg-Christoph; Hülle, Sebastian; Kosyakova, Yuliya; König, Corinna; Kreuter, Frauke; Küfner, Benjamin; Müller, Bettina; Osiander, Christopher; Schwanhäuser, Silvia; Stephan, Gesine; Vallizadeh, Ehsan; Volkert, Marieke; Wenzig, Claudia; Westermeier, Christian; Zabel, Cordula; Zins, Stefan (2020): Impacts of the Covid-19 Pandemic on Labor Market Surveys at the German Institute for Employment Research. In: Survey research methods, Vol. 14, No. 2, pp. 229–233.
Sandner, Malte; Patzina, Alexander; Anger, Silke; Bernhard, Sarah; Dietrich, Hans (2021): The Covid-19 pandemic, well-being, and transitions to post-secondary education. In: IZA Discussion Paper No. 14797.
Walwei, Ulrich (2020): The world after the coronavirus crisis – more supportive, more digital, more sustainable? (Series “Covid-19 Crisis: Consequences for the Labour Market”). In: IAB-Forum, 28 May 2020.
Winters, Jutta; Keitel, Christiane: Work and life in times of lockdown: a step backwards for women? An interview with Claudia Globisch and Michael Oberfichtner, In: IAB-Forum, 8 March 2022.
Zoch, Gundula; Bächmann, Ann-Christin; Vicari, Basha (2021): Gender Differences in Reduced Well-being during the Covid-19 Pandemic – the Role of Working Conditions. IAB Discussion Paper No. 4.
Zoch, Gundula; Bächmann, Ann-Christin; Vicari, Basha (2021): Who cares when care closes? Care-arrangements and parental working conditions during the Covid-19 pandemic in Germany. In: European Societies, Vol. 23, No. sup1, pp. 576–588.

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