End of furlough scheme leaves little impact on unemployment impacts

Wednesday 17th November 2021 05:15 EST

A report reveals the end of the furlough scheme had little impact on the levels of unemployment. There were severe concerns that the withdrawal of the furlough scheme could lead to a spike in unemployment, especially considering more than a million workers were still on the scheme when it came to an end last month.

However, research by the influential Resolution Foundation suggests that only 136,000 workers moved from furlough to either unemployment or inactivity when the scheme was closed. Based on a survey of around 6,100 working-age adults during the second half of last month, this is the first attempt to analyze the effects of closing the programme.

While it is still not clear whether people simply returned to work at their existing company or moved to new jobs, the lack of any clear economic dislocation since the scheme closed suggests workers largely returned to their existing jobs on an either part-time or full-time basis.

Charlie McCurdy, economist at the Resolution Foundation, said, “During its 18-month duration the Job Retention Scheme has supported over 11 million employees, preventing lockdowns and huge behavioural changes from causing catastrophic rises in unemployment.” He added, “Plans to prematurely close the scheme led to concerns that its end would spark a fresh rise in worklessness. But extending the scheme beyond the reopening of the economy this summer has helped to limit this rise.”

“While it is welcome that unemployment has remained low, recently furloughed staff did face a much higher risk of losing their job in October. This reinforces the need for Britain’s stuttering economic recovery to strengthen so that more of these workers can be helped back into work swiftly rather than leaving the labour market altogether.”

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