Impact of the COVID-19 pandemic on employment and social benefit receipt in Finland

Abstract

Abstract The COVID-19 crisis tested welfare states’ resilience in protecting citizens against sudden health-related and economic shocks. However, the crisis’ effects and responses to it vary substantially across countries. Using administrative registers of the Social Insurance Institution of Finland, we evaluate the impact of the COVID-19 crisis on various socio-economic groups by examining the receipt of social benefits and length of benefit spells. Furthermore, we analyse the duration of unemployment and social assistance spells that started during the outbreak of the COVID-19 pandemic and the probabilities of receiving social assistance among different socio-economic groups during the crisis. The results of our analysis show that in 2020, the receipt of unemployment and social assistance benefits was highest among young people and particularly among women. However, extending the analysis to 2021 we found that unemployment spells were shorter among young people than among older age groups. Thus, while the youngest age groups were hardest hit by the crisis in terms of the increase in the number of recipients, they seem to have recovered from it faster than the older age groups. Our findings indicate that the Finnish social security system succeeded fairly well in mitigating the negative impacts of the crisis for vulnerable groups and those who faced job loss since small adjustments to the benefits maintained the income of these groups.