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Impact of COVID-19 shock on a segmented labour market: Analysis using a unique panel dataset

Author

Listed:
  • Das, Satadru
  • Ghosh, Saurabh
  • Mazumder, Debojyoti
  • Tushavera, Jitendra

Abstract

This paper studies the impact of economic crisis caused by the COVID on the Indian labour market using the Periodic Labour Force Survey (PLFS). The unique dataset offers the opportunity to analyse sectoral transition and mobility of workers in response to a crisis due to its rotational panel framework. We employ transition matrices, non-parametric cumulative distribution functions, and machine learning techniques to identify the impact of COVID shock on formal and informal sector workers and whether this impact was heterogeneous. We find that labour market outcomes, both in terms of employment status and income, became even more divergent between the formal and informal sectors during the first wave of pandemic and remained divergent in the recovery phase. The classification analysis highlights that the sector in which the worker was employed (formal or informal sector), was an important predictor of income loss during the first wave.

Suggested Citation

  • Das, Satadru & Ghosh, Saurabh & Mazumder, Debojyoti & Tushavera, Jitendra, 2023. "Impact of COVID-19 shock on a segmented labour market: Analysis using a unique panel dataset," MPRA Paper 116780, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116780
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    More about this item

    Keywords

    Segmented Labour Market; Informality; COVID scarring.;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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