In its fourth version of the paper “Comparing the outcome of Governments’ response to Covid-19 (Analysis of October 2020)”, Adecco examined and updated the government responses to the Covid-19 crisis in 20 countries, in order to determine which policies lead to the best economic outcome.
The countries covered are Australia, Austria, Belgium, Brazil, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Korea, Spain, Sweden, Switzerland, the United Kingdom and the United States.
In order to conduct this analysis, Adecco put together “a set of macroeconomic and pandemic indicators, plotting that against various policy responses, both in terms of pandemic response measures and economic support measures to workers and businesses.”
The macro-economic impact was measured using the latest projections on GDP growth, unemployment, stock market response, consumer confidence and purchasing managers index.
The Pandemic Response Measures took into account the measures taken such as fiscal stimuli, government stringency, confinement and testing regimes and the severity of the covid-19 outbreak.
Measures to support businesses included access to credit, payment deferrals, subsidies for business costs, compensation for workers on sick leave and short-time work/ wage subsidy schemes.
Measures to support workers included where applicable specifically agency workers, comprised access to sick pay and unemployment benefits, moratoriums on dismissals, income support for self-employed workers, skills investments, and other diverse support measures like direct aid.
The 20 countries were ranked from 1 to 20, with the lowest rate being the best performer.
“We can indicate that South Korea appears to have found the best strategy responding to the pandemic by recording the lowest overall score at 35 [...]”. “The countries facing the largest difficulties to mitigate the impact of the pandemic on their economies and control the outbreak of the virus are Spain and Mexico, both having the highest overall score of 126”.
From the analysis, it emerged that:
- “five countries have been able to most effectively address the impact of the crisis:
- South Korea, Sweden and Germany are top scorers on economic indicators, with a relatively low stimulus over time, pointing to a smart combination of effectively applied funds and other measures.
- Australia and Japan have also been able to mitigate the economic impact of the pandemic rather well but have needed larger stimuli to reach that goal”.
- There is a direct link between number of Covid-19 cases/mortality rate and the GDP drop. However, this is not the case for Sweden, the US and Brazil.
- Countries with similar numbers of Covid-19 infections, “Sweden and the UK, or Mexico and Italy, face vastly different economic impacts. In other words: an effective policy response matters”.
Finally, the paper recommends to:
- Keep up economic activity while maintaining the highest level of health and safety at work.
- Social peace: this pandemic demands the cooperation of all country decision makers. “The rankings confirm that those countries with a model of social dialogue based on negotiation and not confrontation are faring best, importantly also with regards to trust in the political process and consumer confidence, needed to accelerate the pace towards economic growth”.
- Support employment: Short-time working schemes and other measures to support continuing work are effective.
- Trigger Active Labour Market Policies: “as further interventions may be necessary and when prolonging existing support measures, countries should start to link instruments for skills development as conditions for continued access to wage subsidy schemes”.