IZA Discussion Paper No. 14929

COVID-19 Government Responses to Labour Market Disruptions and Economic Impacts: The New Zealand Model

The Covid-19 pandemic caused major shifts in the operation and fortunes of several industries within New Zealand, including an immediate impact on the workforce. In this setting, the combined epidemiological and economic responses of the government, businesses and the general public played a significant role in the health of, and the provision of basic necessities to, the population, maintaining the viability of the economy despite lockdowns. Indeed, New Zealand’s combination of policy responses resulted in one of the world’s lowest death rates, while the economy’s economic loss was on a par with the European countries. Policy responses to workforce disruptions included the swift designation of essential service workers, a government-sponsored wage subsidy scheme and the facilitation of remote work and digital commerce, which allowed uninterrupted operations for many businesses and public sector agencies. This paper discusses the changes in the business environment in New Zealand from an economics perspective, and the special elements of the government’s policy response to the Covid-19 pandemic.

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