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

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  • He,Yiming
  • Narayan,Ambar
  • Olinto,Pedro
  • Sinha Roy,Sutirtha
  • Sarma,Nayantara

Abstract

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.

Suggested Citation

  • He,Yiming & Narayan,Ambar & Olinto,Pedro & Sinha Roy,Sutirtha & Sarma,Nayantara, 2023. "Synthesis of the Impacts of Covid-19 on India’s Labor Market : Looking at People, Placesand Policies," Policy Research Working Paper Series 10366, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10366
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    References listed on IDEAS

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    1. Deshpande, Ashwini & Ramachandran, Rajesh, 2020. "Is Covid-19 "The Great Leveler"? The Critical Role of Social Identity in Lockdown-induced Job Losses," GLO Discussion Paper Series 622, Global Labor Organization (GLO).
    2. Ashwini Deshpande, 2020. "The Covid-19 Pandemic and Lockdown: First Effects on Gender Gaps in Employment and Domestic Work in India," Working Papers 30, Ashoka University, Department of Economics, revised 02 Jun 2020.
    3. Fatih Guvenen & Fatih Karahan & Serdar Ozkan & Jae Song, 2017. "Heterogeneous Scarring Effects of Full-Year Nonemployment," American Economic Review, American Economic Association, vol. 107(5), pages 369-373, May.
    4. Melanie Khamis & Daniel Prinz & David Newhouse & Amparo Palacios-Lopez & Utz Pape & Michael Weber, 2021. "Early Labor Market Impacts of COVID-19 in Developing Countries," World Bank Publications - Reports 35047, The World Bank Group.
    5. Deshpande, Ashwini, 2020. "The Covid-19 Pandemic and Lockdown: First Order Effects on Gender Gaps in Employment and Domestic Time Use in India," GLO Discussion Paper Series 607, Global Labor Organization (GLO).
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