In its latest World Economic Outlook report, International Monetary Fund pointed out that impact of COVID-19 has been highly unequal across group of workers. In emerging markets and developing economies, youth and lower-skilled workers have been hit harder "with larger rises in unemployment rates and declines in labour force participation".
Women, on the other hand, in emerging markets and developing economies have seen a slightly higher rise in unemployment and larger drop in participation than men, the report said. In advanced economies, there is little difference in average unemployment across genders.
These movements in unemployment and labour force participation rates imply that average employment rates have declined across groups, the report stated.
"In the near term, the consequences for these more vulnerable demographic groups are potentially dire, as they face earnings losses and difficult searches for job opportunities after unemployment spells. Even after the pandemic abates, some of the effects on the structure of employment may be persistent, with some sectors and occupations (job types) permanently shrinking and others growing," said the April 2021 World Economic Outlook.
Sectors more susceptible to automation have seen steeper decline in employment with fall in the share of employed workers with lower skills, the report further said.
"There are signs that the COVID-19 shock is accelerating pre-existing trends, with employment shifting away from sectors and occupations that are more vulnerable to automation. These broad effects were also visible in movements in worker flows during past recessions, although the specific sectors that are most hurt-such as wholesale and retail trade and accommodation and food-differ with the pandemic shock," it said.
As seen in previous recessions, sectoral labour reallocation has picked up during COVID-19 pandemic recession too. "Relatedly, at the individual level, a worker's likelihood of switching occupations is greater after an unemployment spell than it is while they are still employed. But occupational switches via unemployment are costly, with workers typically incurring a large earnings penalty compared with similar workers who find reemployment without having to change occupations," the report added.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today