Future of work
A curated resource of recent research on trends shaping Canada's labour market.
Developed countries are now aggressively deploying fiscal and monetary policies to prevent a global economic catastrophe caused by the coronavirus. However, the authors suggest avoiding policies that would encourage a major, persistent reallocation of employment, which could result in the sudden destruction of firm-specific human capital and its customer base.
Instead, policies should facilitate quick but temporary emergency reallocation of employment, while preserving worker attachment to their previous jobs. This can be accomplished by providing businesses with interest-free loans to cover their fixed costs and by converting those loans to grants should the business rehire its former employees when normal operations resume. Maintaining worker attachment to their previous employers would preserve the aggregate stock of firm-specific human capital, while also avoiding any persistent mismatch that could turn this temporary economic shock into a prolonged stagnation.