Impact on labour supply due to COVID-19 containment measures in India: An informal employment analysis
This study looks at the employment situation in India, laying particular emphasis on informal employment.
The COVID-19 pandemic unleashed an unprecedented world crisis. The restrictions introduced to mitigate the spread of the virus affected millions of workers and businesses across the world.
In India, on 24 March 2020, the government established a nationwide lockdown for 21 days, under one of the most stringent preventive and containment measures in the world. These measures were relaxed on 14 April 2020 and then, on 4 May 2020, for workplaces in regions outside red zones. The closure of workplaces impacted most workers, especially those who lack a job or income security, specifically focusing on those in the informal economy.
This study looks at the employment situation in India, laying particular emphasis on informal employment. To estimate the labour supply impact in India due to the containment measures, we followed a similar methodological approach by del Rio-Chanona et al. (2020) and the adapted framework to India from Estupinan et al. (2020). Therefore, estimates of the total impact on labour supply consider the Government of India’s (GoI) lockdown notifications affecting workers employed in non-essential industries and the share of workers who cannot work from home by utilizing a remote labour index (RLI).
The paper concludes that the first lockdown measures directly affected 104 million informal workers. Furthermore, the impact estimate under the relaxed notifications (15 April 2020) dropped to 69.5 million informal workers. Thus, the estimated share of informal employment directly impacted by the first and the second lockdown periods represents 89.5 and 88 per cent of the total employment affected by the containment measures, respectively. Most of the affected informal employment (75 per cent) are employed in the informal sector, with 17.8 per cent in the formal sector and 7.2 per cent in private households.
In India, on 24 March 2020, the government established a nationwide lockdown for 21 days, under one of the most stringent preventive and containment measures in the world. These measures were relaxed on 14 April 2020 and then, on 4 May 2020, for workplaces in regions outside red zones. The closure of workplaces impacted most workers, especially those who lack a job or income security, specifically focusing on those in the informal economy.
This study looks at the employment situation in India, laying particular emphasis on informal employment. To estimate the labour supply impact in India due to the containment measures, we followed a similar methodological approach by del Rio-Chanona et al. (2020) and the adapted framework to India from Estupinan et al. (2020). Therefore, estimates of the total impact on labour supply consider the Government of India’s (GoI) lockdown notifications affecting workers employed in non-essential industries and the share of workers who cannot work from home by utilizing a remote labour index (RLI).
The paper concludes that the first lockdown measures directly affected 104 million informal workers. Furthermore, the impact estimate under the relaxed notifications (15 April 2020) dropped to 69.5 million informal workers. Thus, the estimated share of informal employment directly impacted by the first and the second lockdown periods represents 89.5 and 88 per cent of the total employment affected by the containment measures, respectively. Most of the affected informal employment (75 per cent) are employed in the informal sector, with 17.8 per cent in the formal sector and 7.2 per cent in private households.