Disparities in labour market and income trends during the first year of the COVID-19 crisis: Evidence from Germany

Abstract

Germany’s labour market has weathered the COVID-19 crisis quite well. The unemployment rate increased by less than one percentage point between the last pre-crisis quarter Q4 2019 and its peak in Q3 2020 (from 3.2% to 4.1%); the employment rate fell by less than five percentage points (from 75.7% to 71.1%). Both indicators have since returned to their pre-crisis levels (OECD, forthcoming[1]). The widespread use of Germany’s Kurzarbeit short-time work scheme was one of the key factors for this success, as it had been already during the global financial crisis. This brief provides insights into inequalities in labour market outcomes, incomes and economic concerns across workers in Germany during the first year of the COVID-19 crisis, drawing on survey data from the SOEP-CoV up to January/February 2021.