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

Satadru Das, Saurabh Ghosh, Debojyoti Mazumder and Jitendra Tushavera

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Segmented Labour Market; Informality; COVID scarring. (search for similar items in EconPapers)
JEL-codes: J31 J46 J62 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-big, nep-iue and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:116780

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