The Pandemic, Lockdown and Employment
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The Pandemic, Lockdown and Employment Ajit K. Ghose1 Published online: 19 September 2020 © Indian Society of Labour Economics 2020
The COVID-19 generated a public health crisis in India, and the government’s response to it generated an employment crisis. The nationwide lockdown that was imposed to contain the spread of the virus also meant an effective shutdown of a large part of the economy for a period of two months. In an economy such as India’s, where employment conditions remained poor even after years of rapid economic growth, the adverse effects of the economic shutdown on employment and livelihoods have been huge and immediate. How, when and to what extent these will be reversed are not easy to predict. In this note, I attempt to develop a concrete view of the nature and magnitude of the immediate effects of the economic shutdown on employment in the economy. I do this in two steps. In the first step, I consider the structure of employment in 2018, which can be taken to be the structure of employment that existed before the shutdown shock hit the economy. This provides a basis for assessing the type and quantity of employment that could be regarded as potentially most vulnerable to the shock. Based on this assessment, at the second step, I develop estimates of the magnitude of loss of employment of different types that the economic shutdown is most likely to have caused. I conclude with a few observations on post-lockdown prospects of reversal of trends, that is, of rehabilitation of lost employment and livelihoods.
1 Economic Shutdown and Employment Judgement about vulnerability of employment to the shock of an economic shutdown has to be based on two basic considerations. The first relates to types of employment: certain types of employment can speedily disappear in times of economic crisis, while other types suffer partial or even no loss. In India, there are four basic types of employment: regular–formal wage employment, regular–informal wage employment, casual wage employment and self-employment (Ghose 2016). The type of wage employment that is most vulnerable is casual wage employment—daily * Ajit K. Ghose [email protected] 1
Institute for Human Development, New Delhi, India
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employment on a daily wage; persons in employment of this type face immediate loss of job and livelihood in the case of cessation of the economic activities they are engaged in. Regular–informal wage employment—salaried jobs that offer no security of tenure or social protection—is also vulnerable though less so than casual wage employment. A large section of the self-employed operates with poor asset base and hence is vulnerable to shocks. Only 4% of the self-employed are employers (who use mainly hired labour) who can be regarded as having a reasonably secure base. Many of the rest—the own account workers and the unpaid family workers— are vulnerable to economic shocks. The only kind of employment that can be considered
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