Immediate employment and income impacts of Covid-19 in New Zealand: evidence from a survey conducted during the Alert Level 4 lockdown

Abstract

The Covid-19 Level 4 lockdown represented an unprecedented and sudden shock to the New Zealand labour market. Using unique data collected during lockdown (n = 2002), this study examined the work circumstances of individuals and the economic shock in terms of income and job loss to both individuals and households. We found that the unemployment effectively doubled rising from 5.2% just prior to lockdown to 10.5% by week 3 of lockdown. Close to 44% of individuals lived in a household where members experienced job and/or income loss. While economic loss was widespread, some groups were harder hit, particularly those with lower incomes.

KEYWORDS:

• Job loss
• income loss
• work status
• unemployment
• lockdown
• Covid-19
• pandemic

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 New Zealand’s stringency index was 96.3 out of 100. In comparison, on March 26, China’s score was 81.9, the UK’s was 75.9, the USA’s 72.7, and Australia’s 64.5. Only three countries (Argentina, India, and the Philippines) scored 100.

2 See Fletcher (2020) for a detailed description of the scheme.

3 For more detail on the survey see Prickett, Fletcher, Chapple, Doan, and Smith (2020).

4 By comparison, StatsNZ’s ‘experimental’ labour market flows data estimate quarterly flows out of employment of 6.0 percent between the March and June 2020 quarters, up from 4.4 percent for the same quarters a year earlier (Stats, 2020b).

5 For cell size reasons, the survey grouped some ANZSIC Level 1 classifications together and this latter category also includes information technology, media and rental industry workers.

6 Differences between groups noted in the text are significant at at least p < .05.

7 Typically in the HLFS, Māori and Pacific unemployment rates are 2.5-3.5 times higher than those of NZ Europeans. A risk ratio of this size is not observed in the lockdown survey, which suggests sampling error or bias in the sampling frame towards those Māori and Pacific people who have a better labour market performance.

8 Government responses to the influenza epidemic included a hastily introduced Epidemic Allowance for the widows (and widowers with children) of influenza victims, which like the current Covid-19 Income Relief Payment, was paid at a considerably higher rate than the standard widow’s pension (Social Security Department, 1950, p. 28).