Covid-19: ’Recall clause’ could alleviate worker anxiety

A 'recall clause' for workers employed by businesses significantly hit by the coronavirus pandemic could help alleviate worker anxiety, and encourage them to take stopgap jobs that are urgently required to face the heath crisis, suggests a new study UCL study. Most importantly, the measure would keep the economy ready to swiftly resume "business as usual" once the health emergency subsides. The analysis, published as a VoxEU column and carried out with Yale University and the Federal Reserve Bank of Philadelphia, draws on research on the aftermath of the Great Recession of 2008-2009 in the US. The researchers argue that policy-makers in the US, and around the world, adopt policies that provide insurance for businesses and do not fundamentally alter the fabric of the world economy. At the same time, they argue that significant temporary employment reallocation is needed to the face the emergency. Professor Fabien Postel-Vinay (UCL Economics), said: "Governments and central banks in developed countries are hastily deploying aggressive macroeconomic policies of different shapes and types to fend off a global economic catastrophe caused by the COVID-19 pandemic. "Despite the urgency, whether real or perceived, of these measures, it is essential to design these policies carefully.