COVID: Not a Great Equalizer

Abstract

Coronavirus has been portrayed as the ‘great equalizer’. None seems immune to the virus and to the economic consequences of the lockdown measures imposed to contain its diffusion. We exploit novel data from two real-time surveys to study the early impact on the labor market of the lockdown in Italy—one of the two countries, with China, hit hard and early. We find that low-educated workers, blue collars, and low-income service workers were more likely to have stopped working both 3-week and 6-week after the lockdown. Low-educated workers were less likely to work from home. Blue collars worked more from their regular workplace, but not from home. Low-income service workers were instead less likely to work from the regular workplace. For both blue collars and low-income service workers, the monthly labor income dropped already in March. Some positive adjustments took place between the 3rd and the 6th week from the lockdown: the share of idle workers dropped, as the proportion of individuals working at home and from their regular workplace increased. However, these adjustments benefited mostly highly educated workers and white collars. Overall, low-income individuals faced worse labor market outcomes and suffered higher psychological costs. (JEL codes: J21, I24, and H12)

The Covid-19 Pandemics: why Intersectionality Matters

“… Adams-Prassl et al (2020) shows that sectors such as arts and entertainment, education, food, accommodation and retail suffered in all countries considered in their study (United Kingdom, United States and Germany). The same occurred in Australia ( Churchill, 2020 ) and Italy ( Galasso, 2020 ). These are sectors in which women are over-represented, leading to a higher impact on their individual income ( Alon et al, 2020 ).…”

“… Blundell et al (2020) demonstrated that in United Kingdom women, young and low-paid workers are those that suffered the most from the lockdown. In Italy, Galasso (2020) observed adverse effects on blue collars, low-educated workers and low-income services workers as well. Social distancing implied more significant job losses among ethnic minorities in the United States, especially Hispanics ( Béland et al, 2020 ; Montenovo et al, 2020 ).…”

“…Covid-19 is not a great equaliser ( Alfani, 2020 ; Berkhout and Richardson, 2020 ; Fisher et al, 2020 ; Galasso, 2020 ; Lokot and Bathia, 2020 ). Like other more recent pandemics such as the Spanish flu in 1918 or HIV in the ’80s, the virus spread more easily among the vulnerable population.…”

COVID‐19, occupational social distancing and remote working potential: An occupation, sector and regional perspective

“…They identify significant sectoral differences which will in turn deepen existing inequities between and within countries. While initially the COVID‐19 pandemic was portrayed as the “great equalizer” and a virus that does not discriminate, work by Galasso (2020) highlights how low income, low educated and blue collar workers have suffered much worse labour market outcomes and suffered higher psychological costs relative to higher income‐individuals. In the Irish case, Crowley, Doran, and Ryan (2020) identified that COVID‐19 restrictions are likely to have unequal impacts across workers with younger, male, less educated, non‐nationals and the self‐employed more likely to find it difficult to work remotely and to practice social distancing in the workplace.…”

Electoral concerns reduce restrictive measures during the COVID-19 pandemic

“…While the severity and timing of the outbreak may explain part of the variation, several other factors have been pointed out as potential contributors (Frey et al, 2020). In particular, restrictive measures have been shown to hurt the economy (Pew, 2020), and distribute their burden unequally across the population (Galasso, 2020). In this scenario, elected leaders must often trade-off the advice of experts with the preferences of voters, who will ultimately judge their performance.…”