Social policy responses of European countries and Lithuania to the changing economic and social situation due to COVID-19 Business

Impact of COVID-19 on work and income

Although the rapid expansion of teleworking is helping to reduce the impact of COVID-19 on employment and, at the same time, on workers’ earnings, the first wave of COVID-19 is already in 2020. It shocked the labor market in the spring.

By the end of April, about 50 percent. Workers in European countries have experienced reductions in working hours. A third of all workers in the EU and up to half of workers in southern European countries said that working hours had decreased “significantly” (Eurofound, 2020a). 2020 in the July survey, 8 percent. Europeans report that they have lost their jobs as a result of COVID-19.

In Lithuania, the situation was close to the European average, but the proportion of people who lost their jobs was very different in each country: from 3 to 5%. In Sweden, the Netherlands, Slovakia, Malta, Germany, up to 12-16 percent. Latvia, Hungary, Greece, Cyprus and Spain (Eurofound, 2020b). Our survey of the economic situation of the population in November. showed that it affected between 10 and 25% in various aspects. employees (Table 1).

The loss of work and the reduction of working hours have had a negative impact on the income of the population. Survey data shows that the impact of COVID-19 on income varies widely across Europe. The decrease in income in April-May. suffered 60 percent. Bulgarians, but just over 10%. Danish. The situation of the Lithuanian population corresponds to the average of the European countries, almost 40 percent. population.

In the summer, with the introduction of social policy measures, the first wave of the pandemic abated and the lifting of some strict quarantine measures, the decline in population income slowed or even stopped in some countries (Netherlands , Finland, Austria, Czech Republic, Latvia, Hungary, Croatia). In our survey of the economic situation of the population in November. about 30 percent. Lithuanian residents indicated that their situation had deteriorated compared to the beginning of the year.

Scope of social policy measures

The atypical, pandemic, economic and social situation has led national governments to take exceptional measures. Until 2020 November 1, up to 780 of them were counted in all EU countries (COVID-19 EU, 2020). Measures to protect businesses and ensure the provision of vital services have been the most popular in the EU.

The most popular measures for the population in EU countries were income protection measures for unemployed workers: sickness benefits, support for parents and carers, unemployment benefits, extending income protection beyond of existing income protection measures, as well as worker protection due to reduced workload and downtime. A complete list of these measures is provided in Figure 2. In it we see that Lithuania has also applied most of them.

Help the unemployed protect their income

In Lithuania, an equal temporary job search benefit was introduced for all those who lost their job, as well as for those who did not have one before the pandemic, but the current unemployment insurance system remained unchanged (for an assessment more detailed, see here).

On the contrary, many countries have adjusted the modalities of unemployment benefits by modifying the conditions of availability, duration and payment amounts. In total, unemployment insurance schemes have been adjusted in 12 EU countries (Austria, Bulgaria, Denmark, Finland, France, Greece, Ireland, Malta, Portugal, Slovakia, Spain and Sweden). Austria, France, Greece, Portugal, Slovakia and Spain have extended the duration of benefits (Eurofound, 2020c).

Reconciling work and child care

During the quarantine, the right to sickness benefit was adjusted in Lithuania for people who did not work due to the need to care for young children, when, due to the threat of the spread of COVID-19, institutions were closed educational for children. Some countries have changed their laws on the ability to work from home. In Iceland, a law was passed guaranteeing full salary withholding when parents had to stay home to care for their children, as well as a special child benefit.

However, most countries left the determination of work-from-home opportunities to the agreements between employees and employers and did not change the legal framework (Koslowski, 2020). Cyprus, Ireland, Lithuania, Malta and Portugal have introduced support measures for those in self-isolation, while Italy and Romania have introduced special conditions for quarantined workers who have not been able to work from home.

Several states have adapted existing ones or created a special parental leave, introduced benefits, expanded rights to apply for a leave or reduced working hours. Most of the measures were given to parents whose work was not suspended or otherwise affected and who did not work from home. In most cases, as in Lithuania, these plans were not available to parents whose work allowed them to work remotely: this was the case in Austria, Cyprus, France, Luxembourg, Malta and Romania.

Most countries have granted parents or guardians the right to paid leave (in whole or in part). In most cases, they were subsidized by the state, either directly or at the expense of the employer: in Austria, Belgium, Cyprus, France, Greece, Italy, Luxembourg, Malta, Romania.

In Bulgaria, the Czech Republic and Latvia, COVID-19 parental support is provided as a supplementary benefit for children when parents receive a time off allowance, unpaid leave, or when parents teach their children at home. In Lithuania, meanwhile, families were paid money without linking them to their job opportunities.

Prepared by the group of researchers implementing the project supported by LMT “Social policy reactions to the consequences of the COVID-19 crisis: analysis of the unemployment and poverty situation, international experience and recommendations for Lithuania” (P-COV- 20-29), prof. Romas Lazutka.

Romas Lazutka is a professor at Vilnius University, Arvydas Guogis is a professor at Mykolas Romeris University.