The Barcelona Institute of Economics (IEB) has just published the second of its analyses on the impact of COVID-19. Here, the study deals with how employment in Spain will be affected ( https://ieb.ub.edu/en/publication/info-ieb-efecto-de-la-crisis-derivada-de-la-covid-19-sobre-el-empleo-de-la-economia-espanola-numero-34-abril-2020/ ), and is authored by Gemma García and Esteban Sanromà, professors at the University of Barcelona.

The IEB researchers have made a forecast based on a hypothetical scenario with respect to the duration of the confinement period. They have differentiated the intensity of the impact by branch of economic activity. Briefly, they specify that the primary sector and the food industry will not experience direct declines; in the manufacturing industry, they differentiate among the industries for which demand falls, is simply postponed or deferred, and for those that have registered increases. For most of the service industry, sharp declines are expected given falling demand.

The resulting figures in the study take into account adjustments based on the approved support measures. The analysis also indicates that maintaining large public spending over time can have adverse macroeconomic effects on an already high level of public debt and on the risk premium. The authors therefore consider that some form of supranational financial support is essential to limit such risks. Otherwise, and coupled with the need to withdraw support, the destruction of employment would be much greater.