Covid-19 has disrupted the global economy, with major impacts on labor markets; but these effects have varied greatly across regions and countries. While the labor market impacts of the pandemic were closely tracked in rich countries, evidence on the impacts in developing countries is still scarce. In a recent study, we analyze employment impacts in Ethiopia, Malawi, Nigeria, and Uganda for the period March 2020 to March 2021. Job loss there was much higher than that in high-income countries, and job loss patterns were particularly unequal and changed greatly over time.
We track pre-Covid-19 workers using between five and ten rounds of phone survey data collected between April 2020 and March 2021, for which households were sampled from pre-existing face-to-face panel surveys. Among those who worked pre-Covid-19 (including self-employed and unpaid family workers), a striking 61% of respondents in Nigeria lost jobs between March and July 2020. In Ethiopia, Malawi, and Uganda job loss ranged from 18% to 30%. During subsequent months, more than 75% of those who had lost their job were re-employed, with many persons previously employed in non-agriculture moving into the agricultural sector. By March 2021, 14% to 22% of those who worked before Covid-19 remained jobless.
The job loss pattern changed significantly after the initial labor market shock. We analyze patterns of job loss by gender, age, education level, family composition, urban versus rural location, sources of household income, and pre-Covid-19 industry of work. Job loss in the first months of the pandemic was more likely among women, young, and urban workers—and especially among urban women with young children. Furthermore, in subsequent months up to October 2020, women were less likely than men to be re-employed. Job loss also varied across industries, with workers from manufacturing, utilities, and public administration being most affected.
After one year, however, the early-phase inequalities in job losses had disappeared and education became the main predictor of joblessness: by March 2021, pre-Covid-19 workers with less than primary education were significantly less likely to be working than those with more education. This was despite the extended public works programs implemented in Ethiopia, Nigeria, and Uganda.
The rates of job loss which we document are substantially higher than in Europe and the US, where the employment-to-population ratio declined less sharply during the first months of the pandemic and where it had recovered more fully by early 2021. In the EU, the adjustment occurred mostly through hours worked that resulted from extensive job retention schemes. In the US, the education gradient in job loss was strong throughout the initial shock and the recovery, while the gender gap had started to close by the end of 2020. There are some similarities in job loss patterns: women and less-educated workers were also disproportionately affected in many rich countries as well as in these developing economies. An important question is why in Ethiopia, Malawi, Nigeria, and Uganda, education became a more important predictor of joblessness as the pandemic continued.
© Ivette Contreras, Gbemisola Oseni, Amparo Palacios-López, Janneke Pieters, and Michael Weber
Ivette Contreras is an ET Consultant at the World Bank.
Gbemisola Oseni is a Senior Economist at the World Bank.
Amparo Palacios-López is a Senior Economist at the World Bank.
Janneke Pieters is associate professor of development economics at Wageningen University and a Research Fellow of IZA.
Michael Weber is a Senior Economist at the World Bank and a Research Fellow of IZA.
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