Publication: Workers at Risk: Panel Data Evidence on the COVID-19 Labor Market Crisis in India
Date
2021-03
ISSN
Published
2021-03
Author(s)
Abstract
The COVID-19 pandemic is having unequal impacts.
Research has highlighted that across race, gender, age, and
income groups, the health and economic consequences
of this crisis are far from uniform and other preexisting
inequalities have been exacerbated. This paper focuses on
the differential impact on the formal and informal segments
of the labor market in India, using data from a large household
panel survey and employing a difference-in-differences
event study approach. Within the same industry and district,
initially informal wage workers were significantly
more vulnerable to the loss of employment than initially
formal workers during the early phase of COVID-19 (April
2020). Furthermore, income declined significantly more
for households whose head worked as an informal wage
worker than for households with a formally employed head.
However, the post-COVID employment and income differentials
between informal and formal workers narrowed
after April 2020. By July 2020, the decline in income (from
the pre-COVID baseline of February 2020) was not significantly
different across households with informally and
formally employed heads, suggesting that while informal
workers were affected more severely by the early COVID-19
shock, they also recovered faster from it.
Citation
“Bussolo, Maurizio; Kotia, Ananya; Sharma, Siddharth. 2021. Workers at Risk: Panel Data Evidence on the COVID-19 Labor Market Crisis in India. Policy Research Working Paper;No. 9584. © World Bank, Washington, DC. http://hdl.handle.net/10986/35292 License: CC BY 3.0 IGO.”
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