Delays to the lifting of restrictions and surging cases of the Delta variant have left many summer plans up in the air. And while some predict that a 1920s-style boom is on the horizon, hidden long-term effects may leave indelible scars on the UK economy.
Covid-19 restrictions are now due to lift in England on 19 July 2021, and then in Scotland three weeks later. While new variants and rising case numbers could still derail these timelines (as has happened with several previous schedules), some are asking whether it is time that we ‘learn to live’ with the virus, allowing entertainment venues to re-open their doors at maximum capacity.
For others, the threat of more cases, hospitalisations and deaths isn’t a risk worth taking to bring back festivals, sporting events and nightclubs – particularly while the number of cases of the Delta variant continues to grow. But the reality of this trade-off is more complex, as many people’s ability to make ends meet will depend on large-scale events coming back this summer.
This balance between protecting lives and livelihoods has been at the heart of policy-makers’ decisions since the start of the pandemic. But as highlighted by Paul Dolan and Christian Krekel (both London School of Economics) in a new piece on the Economics Observatory this week, wider considerations of wellbeing also need to be taken into account.
The lockdowns and social restrictions that have sheltered us from the virus have had unintended consequences – from delaying operations and other crucial medical procedures to increasing loneliness and financial difficulties. Christian and Paul call for evaluations of policy that would uncover some of these hidden effects. Measures that capture length of life, quality of life and wellbeing may provide a more rounded picture of how policies, both during the pandemic and in the future, affect people now and in the longer term.
Roaring Twenties redux?
Our wellbeing could certainly get a boost if suggestions of a Roaring Twenties 2.0 come to fruition post-pandemic. But John Turner (Queen’s University Belfast and one of our lead editors) reminds us that the jazz clubs, technological innovation and growth in new consumer products of the 1920s were only half the story.
In the UK, economic growth averaged around 1.4% a year across the decade, which when compared with the 1950s and 1960s (with growth of over 3% a year) can hardly be described as booming. What’s more, unemployment soared and productivity lagged in the UK throughout the 1920s.
Figure 1: UK unemployment rate (1855-2016)
Source: Bank of England, 2016
Even in the United States, where the moniker of the Roaring Twenties is more applicable, John highlights that this is largely a result of the stock market boom between 1925 and 1929 and the increase in credit that allowed Americans to obtain mortgages and buy new cars, radios and refrigerators.
Perhaps the most salient reminder from a century ago is that this credit boom also brought inequality and ended with the Great Depression. Whether the Twenties will ‘roar’ again remains to be seen, but learning lessons from history continues to be paramount.
Saturday’s kids
Many school and university students will be considering their own futures as job prospects look uncertain. As pointed out in an earlier Economics Observatory article from Stuart McIntyre (University of Strathclyde), unemployment among young people has risen sharply during the pandemic, although the extent has varied from region to region.
As a result, higher numbers of students are staying on in education – a pattern seen in previous economic slumps. But as detailed in a new article from Jonathan Wadsworth (Royal Holloway, University of London), fewer young people are now working while they study: only around a tenth of full-time students aged 16-17 now have a part-time job, down from 40% in the late 1990s.
Figure 2: Part-time working among full-time students
Source: Labour Force Survey
As Figure 2 shows, this decline in the traditional Saturday job is more applicable to younger students, while those aged over 20 are still far more likely to be working alongside their studies. Whether this trend will continue once the worst of the pandemic subsides and students are able to have a more ‘normal’ university or college experience is unclear at this stage.
Football crazy
With the knock-out stages of the delayed UEFA European Football Championship upon us, James Reade (University of Reading) has updated his ‘scorecasting’ piece on the chances of each of the last 16 teams progressing further, reaching the final or taking home the trophy.
According to his analysis, England’s odds have gone up, largely because of the way the draw has worked out, and Gareth Southgate’s team now have an 11% chance of winning the tournament. Wales, who were underestimated going into Euro 2020, have a 5% of making it to the final, while Belgium remain firm favourites.
In the Euro 2020 prediction tournament run by James and his colleagues, our very own editor-in-chief Romesh Vaitilingam is currently in second place with an impressive six exact picks. We’ll be cheering him the whole way to the final!
Observatory news
Earlier this month, we published the first issue of our printed magazine, ECO. You can request a free copy via this link or read the magazine online here.
