Synthesis of the Impacts of Covid-19 on India’s Labor Market : Looking at People, Placesand Policies

This paper examines the impact of Covid-19 on a host of labor market outcomes in India, usinga continuous household survey. Cross-sectional trends of headline indicators like unemployment and labor forceparticipation indicate a quick recovery after the unprecedented shock of the pandemic. However, women,marginalized social groups, and youth were more adversely affected, largely due to the nature of their employmentbefore the pandemic. Next, a fixed-cohort analysis with a difference-in-differences regression framework is used tofollow the labor market trajectories of a Covid-affected cohort and a pre-Covid cohort for comparison, over a span of12-16 months. A story of downward transitions emerges, with movements out of the labor force, into more informal andlower-paid types of work in agriculture and rural areas. Higher education and being located in dense, urban areaspartially mediated the adverse shocks of Covid-19. Lastly, India’s extensive vaccination campaign had significantpositive impacts on employment recovery.