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Effect of COVID-19 Pandemic on Employment and Earning in Urban India during the First Three Months of Pandemic Period: An Analysis with Unit-Level Data of Periodic Labour Force Survey

Author

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  • Anindita Sengupta

    (West Bengal State University)

Abstract

Urbanisation has accelerated the pace of development throughout the world. Big cities provide employment and livelihood for workers because of which workers have always migrated from rural areas to cities. However, in India, most of the migrant workers are absorbed in the low-paid and low-skilled jobs in the widespread informal sector. With the outbreak of COVID-19, lockdown was declared suddenly without any notice in India during the last week of March 2019 and most of the urban informal sector workers suddenly lost their jobs, and since they had no protection, they were pushed into poverty. Detailed analysis of such losses is of utmost importance so that perfectly appropriate remedial measures can be taken by the government. Periodic Labour Force Survey (PLFS) report of 2019-20 has analysed the situation of labour market in India for four quarters from July 2019 to June 2020. Therefore, the last quarter of the data will give us the valuable information about the urban labour market during the first three months of the COVID-19 pandemic period. This study analyses the possible reasons behind decline in monthly earnings and labour market participation of urban people in India during the period of outbreak of COVID-19 pandemic, i.e. during the period from April 2020 to June 2020, using the data of fourth quarter from each of the PLFSs of 2017-18, 2018-19 and 2019-20 since they have identical seasonal conditions. We have used cross-tabulation method to find out employment and unemployment rates of people in urban areas according to gender and type of employment for the period, from July to June, for the years 2018, 2019 and 2020. We have also tried to find the reasons behind the decline in income of workers during the first three months of the pandemic period, i.e. during the fourth quarter of 2019-20, compared to the fourth quarter of 2017-18 and that of 2018-19 using the Mincerian wage equation. Our empirical results have shown that urban workers in India have lost jobs and suffered from significant decline in income during the first three months of the COVID-19 pandemic period in almost all types of employment.

Suggested Citation

  • Anindita Sengupta, 2023. "Effect of COVID-19 Pandemic on Employment and Earning in Urban India during the First Three Months of Pandemic Period: An Analysis with Unit-Level Data of Periodic Labour Force Survey," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 283-298, March.
    • Handle: RePEc:spr:ijlaec:v:66:y:2023:i:1:d:10.1007_s41027-023-00428-7
    DOI: 10.1007/s41027-023-00428-7
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    References listed on IDEAS

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    1. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    Cited by:

    1. Yasser Razak Hussain & Pranab Mukhopadhyay, 2023. "How Much do Education, Experience, and Social Networks Impact Earnings in India? A Panel Data Analysis Disaggregated by Class, Gender, Caste and Religion," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Paaritosh Nath & Rahul Menon, 2024. "Labour Market Flows and Gender Differentials in Urban Unemployment over the Pandemic," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 67(1), pages 73-96, March.

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    More about this item

    Keywords

    COVID-19 pandemic; Urban workers; India; Informal sector;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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