Labour market effects of COVID-19 in the Nordic countries: a harmonised microdata comparison

This project analyses how the labour markets in the Nordic countries were affected by COVID-19, and the extent to which observed differences between the Nordic countries can be explained by aggregate policy differences rather than differences in workforce or industry composition.

The project is based on rich administrative register data from Denmark, Finland, Iceland, Norway, and Sweden that include information on characteristics such as age, sex, educational attainment, labour earnings and industry. Importantly, the project constructs harmonised earnings measures that exclude payments from the countries’ different wage support and furlough schemes. These measures are then used to compare labour earnings for actual hours worked across countries.

The empirical strategy is based on comparisons between observed labour market outcomes during the pandemic and expected country-specific outcomes based on pre-pandemic trends. The analysis also accounts for structural differences, such as industry structure and workforce composition. Differences between observed and expected outcomes are interpreted as the effects of the pandemic, and robustness to model choices are tested in various ways.

Project leader

Erik Grönqvist

Other project participants

Linus Liljeberg, Simen Markussen, Hanna Pesola, Anna Thoresson, Peter Rønø Thingholm.