Employment and income support policies during the early phases of COVID-19: Lessons from the U.S., Denmark, and Taiwan

Abstract

As COVID-19 spread across the world in 2020, health and economic activities have been impacted, and unemployment has risen across many countries. The consequences have been particularly harmful to vulnerable populations such as women, racial minorities, or part-time workers. While many governments enacted employment and income support policies as a response to this economic and health crisis, there has been a lack of comparative and evaluative reviews of how policies have addressed unemployment and inequality during the pandemic. In this study, we draw on Esping-Andersen’s (1990) frame of a liberal versus social-democratic welfare state to contextualize some employment and income support polices during the early phases of COVID-19 from the U.S., Denmark, and Taiwan, aiming to enhance the understanding of such policies. We found that the U.S., being more aligned with a liberal welfare state regime, relied on more market mechanisms to address labor and employment issues. Denmark and Taiwan, being more aligned with a social-democratic welfare state, enacted more interventions in and redistributions outside of the market to address employment problems. The human costs of unemployment and unemployment and labor market hysteresis are addressed in light of these two different approaches and outcomes.