More Less
More Less

Covid-19 shutdowns and the self-employed

Opinion image

The Covid-19 pandemic led to government closures of most businesses, childcare facilities, and schools in the US. This caused serious disruptions to people’s work, schooling, and family lives. Work that could be done remotely was moved to impromptu home offices. While working from home, parents had to engage simultaneously in more caregiving than they had previously done. Thus, the major impact of these closures was destined to fall on parents. Given social norms, mothers have been particularly burdened; consequently, many years of gains in women’s labor market position may have been undone by these shutdowns. 

Given that pre-Covid time diaries from the 2018 American Time Use Survey showed that, on an average day, 51% of unincorporated self-employed workers worked at home on their main job at least part of the day, while only 21% of wage and salary workers did, self-employed workers were perhaps better situated than wage and salary workers for working from home. In addition, self-employed workers have more flexibility in setting their hours of work than wage and salary workers.

Because married workers have a spouse whom they can rely on and trade off household duties with, they also may be better insulated than single workers from the negative effects of the shutdowns. However, this often comes at the expense of the mother’s employment.  

Using the US Current Population Survey, we found that, although the shutdowns decreased employment and hours for all groups of self-employed workers in April 2020 at their height (compared to February 2020), there were disproportionate effects by gender, marital status, and parental status. Married women were 6 percentage points less likely to be employed and at work than married men. However, married fathers of school-age children who remained employed were working six fewer hours per week compared to married men without children, suggesting that these fathers may have been helping their children with school assignments.  

Single women, on the other hand, were 14 percentage points more likely to be working on average than single men, with single fathers being especially hard hit by the shutdowns. Having a job that could plausibly be done remotely, or working in an essential industry, mitigated some of the negative labor market effects. For example, among those who remained employed, single women who could possibly do their work from home or worked in an essential industry worked seven more hours per week than single women who could not work at home or worked in a nonessential industry. Having an extra adult in the household also helped mitigate the negative effects of the shutdowns on hours worked for single women who remained working.

There was also a rebound in hours worked in May for married men with young children but not for married women with young children, as some of the industry (but not most school or childcare) shutdowns were reversed, suggesting that self-employed women may remain out of the labor force longer than self-employed men when, as expected, many schools remain virtual this fall. This could have serious long-term negative ramifications for the gender gap in labor force participation and wages as well as for household income.

© Charlene Marie Kalenkoski and Sabrina Wulff Pabilonia

Charlene Marie Kalenkoski is a professor in the Department of Personal Financial Planning at Texas Tech University and a Research Fellow of IZA.
Sabrina Wulff Pabilonia is a research scientist in the US Bureau of Labor Statistics and a Research Fellow of IZA.

Disclaimer: All views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of the US Bureau of Labor Statistics.

Find more IZA World of Labor coronavirus content on our curated topics pages: National responses to Covid-19 and Covid-19—Pandemics and the labor market.

Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.

How can we improve IZA World of Labor? Click here to take our 5-minute survey and enter a prize draw.