Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries
This paper utilizes firm survey data to understand which formal private sector jobs are most at risk from COVID-19 or similar future crises, based on empirical evidence from two middle income economies. In particular, it estimates the importance fo...
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World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/undefined/475721642606247960/Understanding-and-Predicting-Job-Losses-Due-to-COVID-19-Empirical-Evidence-from-Middle-Income-Countries http://hdl.handle.net/10986/36865 |
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okr-10986-368652022-01-25T05:10:36Z Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries Hatayama, Maho Li, Yiruo Osborne, Theresa PRIVATE SECTOR EMPLOYMENT JOB LOSS LABOR FORCE PARTICIPATION LABOR SUPPLY CORONAVIRUS COVID-19 PANDEMIC IMPACT LABOR MARKET FIRMS This paper utilizes firm survey data to understand which formal private sector jobs are most at risk from COVID-19 or similar future crises, based on empirical evidence from two middle income economies. In particular, it estimates the importance for formal private-sector job losses of various COVID-19 pandemic-related labor market shocks and mitigating factors, such as the closure of non-essential industries, workers’ ability to perform their jobs from home, infection risks to workers, customers’ infection risk, global demand shocks, input supply constraints, employers’ financial constraints, and government support, in determining the level and distribution of job losses. This provides an empirical identification of the main risk factors for job loss and a basis for predicting the level and distribution of these losses due to the crisis. The methodology is applied to permanent formal private sector (PFPS) jobs in core productive manufacturing and services sectors (captured by World bank Enterprise Surveys) in Jordan and Georgia, which contain the requisite data to link occupational structure, task content, and firm-level shocks. Comparing empirical findings across the two, the paper assesses the degree of commonality of these risk factors. Job losses are projected for different groups within the employed population prior to the outbreak of COVID-19 and compared with post-crisis labor force data. The results indicate that in these countries the level of job losses is predominantly due to a reduction in demand rather than a reduction in the supply of labor. Closures, global demand shocks, supply disruptions, and other unexplained demand side shocks are significant determinants of jobs lost. Sensitivity of employment to closures, supply disruptions, and sales shocks was of similar magnitude in both countries; however, variation in infection risk was a significant determinant of sales only in Georgia. At the same time, Georgian formal firms were better able to rebound their sales and hire back workers than formal firms in Jordan. Finally, the paper finds no evidence that firms with workers performing tasks that can be performed from home were better able to preserve jobs, given the dominant role of firm-level demand and supply chain shocks. 2022-01-24T17:22:53Z 2022-01-24T17:22:53Z 2021-12 Working Paper http://documents.worldbank.org/curated/undefined/475721642606247960/Understanding-and-Predicting-Job-Losses-Due-to-COVID-19-Empirical-Evidence-from-Middle-Income-Countries http://hdl.handle.net/10986/36865 English Jobs Working Paper;No. 65 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Europe and Central Asia Georgia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
PRIVATE SECTOR EMPLOYMENT JOB LOSS LABOR FORCE PARTICIPATION LABOR SUPPLY CORONAVIRUS COVID-19 PANDEMIC IMPACT LABOR MARKET FIRMS |
| spellingShingle |
PRIVATE SECTOR EMPLOYMENT JOB LOSS LABOR FORCE PARTICIPATION LABOR SUPPLY CORONAVIRUS COVID-19 PANDEMIC IMPACT LABOR MARKET FIRMS Hatayama, Maho Li, Yiruo Osborne, Theresa Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| geographic_facet |
Europe and Central Asia Georgia |
| relation |
Jobs Working Paper;No. 65 |
| description |
This paper utilizes firm survey data
to understand which formal private sector jobs are most at
risk from COVID-19 or similar future crises, based on
empirical evidence from two middle income economies. In
particular, it estimates the importance for formal
private-sector job losses of various COVID-19
pandemic-related labor market shocks and mitigating factors,
such as the closure of non-essential industries, workers’
ability to perform their jobs from home, infection risks to
workers, customers’ infection risk, global demand shocks,
input supply constraints, employers’ financial constraints,
and government support, in determining the level and
distribution of job losses. This provides an empirical
identification of the main risk factors for job loss and a
basis for predicting the level and distribution of these
losses due to the crisis. The methodology is applied to
permanent formal private sector (PFPS) jobs in core
productive manufacturing and services sectors (captured by
World bank Enterprise Surveys) in Jordan and Georgia, which
contain the requisite data to link occupational structure,
task content, and firm-level shocks. Comparing empirical
findings across the two, the paper assesses the degree of
commonality of these risk factors. Job losses are projected
for different groups within the employed population prior to
the outbreak of COVID-19 and compared with post-crisis labor
force data. The results indicate that in these countries the
level of job losses is predominantly due to a reduction in
demand rather than a reduction in the supply of labor.
Closures, global demand shocks, supply disruptions, and
other unexplained demand side shocks are significant
determinants of jobs lost. Sensitivity of employment to
closures, supply disruptions, and sales shocks was of
similar magnitude in both countries; however, variation in
infection risk was a significant determinant of sales only
in Georgia. At the same time, Georgian formal firms were
better able to rebound their sales and hire back workers
than formal firms in Jordan. Finally, the paper finds no
evidence that firms with workers performing tasks that can
be performed from home were better able to preserve jobs,
given the dominant role of firm-level demand and supply
chain shocks. |
| format |
Working Paper |
| author |
Hatayama, Maho Li, Yiruo Osborne, Theresa |
| author_facet |
Hatayama, Maho Li, Yiruo Osborne, Theresa |
| author_sort |
Hatayama, Maho |
| title |
Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| title_short |
Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| title_full |
Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| title_fullStr |
Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| title_full_unstemmed |
Understanding and Predicting Job Losses Due to COVID-19 : Empirical Evidence from Middle Income Countries |
| title_sort |
understanding and predicting job losses due to covid-19 : empirical evidence from middle income countries |
| publisher |
World Bank, Washington, DC |
| publishDate |
2022 |
| url |
http://documents.worldbank.org/curated/undefined/475721642606247960/Understanding-and-Predicting-Job-Losses-Due-to-COVID-19-Empirical-Evidence-from-Middle-Income-Countries http://hdl.handle.net/10986/36865 |
| _version_ |
1764486048054771712 |