Publication type
Journal Article
Authors
Publication date
March 1, 2026
Summary:
In March 2020, the UK government implemented the Coronavirus Job Retention Scheme, otherwise known as furlough, to minimise the impact of job losses. The UK furlough protected jobs during the COVID-19 crisis, covering up to 80 per cent of a worker's monthly wage for hours not worked. We evaluate the causal effects of furlough on mental health, life satisfaction and loneliness, considering different labour market transitions in the pandemic. We employ a difference-in-differences estimator with propensity score matching, using data from the main stage and the COVID-19 waves of Understanding Society, the UK Household Longitudinal Study. We show that furlough protected workers’ mental health and well-being, compared with non-furloughed workers and unemployment. We also find no detrimental effect on well-being to being furloughed compared with continuous employment. The well-being gains from furlough are particularly evident for those with pre-existing health conditions. Overall, policies that mitigated negative labour market transitions during the pandemic had positive effects on the well-being of the working population.
Published in
Fiscal Studies
Volume and page numbers
Volume: 47 , p.89 -106
DOI
https://doi.org/10.1111/1475-5890.70010
ISSN
01435671
Subjects
Notes
© 2025 The Author(s). Fiscal Studies published by John Wiley & Sons Ltd on behalf of Institute for Fiscal Studies.
Open Access
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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