COVID-19, job loss, and underemployment: who is affected?

Abstract

This paper seeks to examine the short-term adverse effects of the labor market disruptions caused by the COVID-19 pandemic on employment by estimating and comparing the probability of job loss, underemployment, and employment gain in January, April, and July 2020. Using data from the Philippine Labor Force Survey, we find that the workers who were most vulnerable to job loss and underemployment amid the COVID-19 pandemic are male, less educated, and those working in sectors that are either with limited operational capacity or not allowed to open at all. On a positive note, the results also suggest that males and less-educated individuals are more likely to gain employment after being jobless in the previous quarter. A policy recommendation is to establish an institutionalized social insurance program, such as an unemployment insurance facility, to protect a wider range of workers from the negative shocks to the labor market.