JobKeeper: An Initial Assessment

• Published date: 01 March 2023
• Author: Jeff Borland,Jennifer Hunt
• Date: 01 March 2023
• DOI: http://doi.org/10.1111/1467-8462.12503

The Australian Economic Review, vol. 56, no. 1, pp. 109–123 DOI: 10.1111/1467-8462.12503

JobKeeper: An Initial Assessment

Jeff Borland and Jennifer Hunt*

Abstract

We present details of the design and imple-

mentation of the 2020–2021 JobKeeper pro-

gram and review the literature on its impacts.

JobKeeper stimulated the macroeconomy and

restrained job loss in the downturn. But

because the program was not narrowly

targeted, the cost per job saved was high

and the impact most likely regressive.

However, it would not have been possible to

devise and implement a more targeted pro-

gram in the available time, and as it was,

JobKeeper was arguably implemented later

than needed for maximum effectiveness. We

therefore recommend that Australia consider

establishing a short‐time work program for

use in future recessions.

1. Introduction

The JobKeeper program was introduced in late

March 2020, at the height of f ears about the

potential adverse impact of COVID‐19. With a

cost of $88.2 billion over its 12 months of

operation, it was the most expensive of the

suite of policies implemented by the Australian

Government to deal with the pandemic

(Watson, Tervala and Sainsbury 2022, p.

30).

1

The cost of the program, its distinctive

design features, and the desire to understand

‘what worked’incase there is a next time, have

already attracted sufficient scholarly attention

that we can give a well‐informed assessment of

JobKeeper's impacts.

The evidence suggests that JobKeeper did

raise aggregate demand and save an appreci-

able number of jobs, as intended. However,

because liberal eligibility criteria were asso-

ciated with large outlays, the cost per job

saved was relatively high; and the impact on

the distribution of income was most likely

regressive. Lack of targeting was dictated by

the need to distribute benefits quickly and

therefore via existing administrative systems.

But with the luxury of more time to plan and

prepare, it is important to consider whether a

better alternative to JobKeeper might exist in

future crises. We recommend taking steps that

would allow a short‐time work scheme,

modelled on the German system, to be used

in a future episode.

The rest of our article proceeds as follows.

Section 2 presents an overview of the program.

Section 3 provides descriptive statistics on the

incidence of JobKeeper. Section 4 summarises

* Borland, Department of Economics, The University of

Melbourne; Hunt: Department of Economics, Rutgers

University; School of Economics, University of Sydney

(Research Affiliate); National Bureau of Economic

Research. Corresponding author: Borland, email <jib@

unimelb.edu.au>.

© 2023 The Authors. The Australian Economic Review published by John Wiley & Sons Australia, Ltd on behalf of The University of

Melbourne, Melbourne Institute: Applied Economic & Social Research, Faculty of Business and Economics.

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