Posts categorized under COVID-19
During the COVID-19 pandemic, the Portuguese government provided a plethora of different support measures for firms. These included state-guarantees for new loans and a public moratorium for existing ones. These measures have been essential to support firms in the most acute phase of the crisis by providing liquidity at reduced costs in a context of an abrupt increase in the level of risk. However, there are still open questions regarding the medium- to long-term impact of these measures.
The debate on if and how to shorten the length of the working week has strengthened in the past years, especially because of the COVID-19 pandemic. The number of working hours can have a direct impact on economic outcomes such as labor cost, employment, and productivity, but also workers’ health and welfare. Since 1995, there have been five national reforms reducing standard working time in European countries. Aside from the (in)famous French 35-hour reform, an interesting yet understudied case study is that of the 1996 Portuguese reform.
Many countries introduced or ramped-up loan guarantee schemes to bridge liquidity shortages as a key element of the policy response to the COVID-19 crisis. The analysis in this paper discusses the potential short and medium-term effects on productivity of loan guarantees via reallocation, relying on historical data on European firms. The findings suggest that, absent policy support, the COVID-19 shock had the potential to seriously distort market selection, as it would have raised sharply the probability to face financial difficulties across the whole distribution of firm-level productivity.
The inappropriate use of Emergency Department (ED) service by patients with non-urgent health problems is a worldwide problem, including in Portugal. Nowadays, with the COVID-19 pandemic, the problem is growing and the subject is again on the agenda. Every patient admitted to the ED is submitted to a risk stratification (RS) assessment. Among the various recognized RS systems, the Manchester Triage System (MTS) has international dissemination. MTS establishes five categories/clinical priorities, instituting a colour for each of them.
Is self-employment typically good for one’s health? This is an important question as a large number of people around the world and also in Europe are self-employed and many express concerns about the potential negative effects of this type of work. This research question also matters in the context of the Covid crisis. The COVID-19 pandemic may contribute to the growth of self-employment (as the labour market contracts and many individuals look to developed their own work opportunities).
Governments around the world devote substantial resources to support small and medium sized firms struggling with the consequences of economic and financial crises. A key question is whether the firms that stand to benefit most from government programs—for example, smaller firms or those with limited access to traditional financing—face information frictions that hamper access to aid. This paper tests whether informational frictions prevent firms from accessing government support measures. The paper considers the impact of providing detailed information on two COVID-19 assistance measures—a layoff support program and a guaranteed credit line scheme—on firm take-up using a sample of over 170,000 Portuguese firms (see figure).
The COVID-19 pandemic has forced many workers to work from home. Even before this emergency shift, there were societal calls for allowing workers location and time flexibility to achieve a better work-life balance (e.g. EU Directive 2019/1158). While there may be social benefits from working at home, research on the impacts of remote work on worker productivity and firm profitability shows contradictory results. This paper studies the impact on worker productivity of a precondition for remote work, namely the possibility to access firm resources remotely.
The economic shock prompted by the COVID-19 pandemic strongly restricts Portuguese firms’ ability to generate profits, contributing to an increase in their financial vulnerability and undermining their capacity to meet credit commitments in the short and medium term. This paper assesses the impact of the COVID-19 pandemic on the debt levels of vulnerable firms. Firms are defined as financially vulnerable if their operating profits are less than twice the amount of interest expenses.
The COVID-19 pandemic has led to a significant decline in demand in Portugal and elsewhere in the world. In Portugal, private consumption is projected to fall by 8% in 2020 and investment spending by 11%. Furthermore, private consumption growth over the long-run is likely to remain low due to ageing demographics of the Portuguese society: its old-age dependency ratio is at 40%, already 10% higher than the OECD average. Where then might an increase in aggregate demand come from?
While experts had warned about the likelihood of a pandemic given the increasing frequency of outbreaks in this century, SARS-CoV-2 caught the world largely unprepared. Over the last century, pandemics have been responsible for more deaths than armed conflicts. Their impact on economic activity is also overwhelming. This paper presents early evidence of the impact of the covid-19 pandemic on the Portuguese economy. The paper uses novel and comprehensive data on electronic payments from SIBS, the main provider of point of sale terminals and on-line payments in Portugal.
Are training grants a useful policy to increase productivity? (A policy suggestion during the coronavirus pandemic.)March 16, 2020
Recent research by the European Investment Bank indicates that workers in Europe spend less than 0.5% of their working time on training. This figure seems too low and indeed there are good economic reasons to suggest some degree of under-provision of training. First, training is expensive for firms, as it entails significant direct and indirect costs. Second, employers know they will lose their investments in training if employees subsequently leave.
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