This paper examines how the COVID-19 pandemic affected the employment of different groups of workers across 40 mostly low and middle-income countries. Employment outcomes during the crisis are tracked through high-frequency phone surveys conducted by the World Bank and national statistics offices. Our results show that larger shares of female, young, less educated, and urban workers stopped working at the beginning of the pandemic. Differences in work stoppage between urban and rural workers were markedly smaller than those across gender, age, and education groups. Preliminary results from 10 countries suggest that following the initial shock at the start of the pandemic, employment rates partially recovered between April and August 2020, with greater gains for those groups that had borne the brunt of the early jobs losses. Although the high-frequency phone surveys over-represent household heads and therefore overestimate employment rates, a validation exercise for five countries suggests that they provide a reasonably accurate measure of disparities in employment levels by gender, education, and urban/rural location following the onset of the crisis, although they perform less well in capturing disparities between age groups. These results shed new light on the distributional labor market consequences of the COVID-19 crisis in developing countries, and suggest that real-time phone surveys, despite their lack of representativeness, are a valuable source of information to measure differential employment impacts across groups during an unfolding crisis.

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We study gender differences in changes in labor market dynamics before the pandemic and during the COVID-19 pandemic in four Latin American and Caribbean (LAC) countries: Brazil, Chile, Dominican Republic, and Mexico. Specifically, we look at differences in labor market states and at differences in the transitions of workers across labor market states. To identify the pandemic’s impact, we compare labor market stocks and labor market flows for a number of balanced panels of workers during the pandemic and before the pandemic. We find that the pandemic has negatively affected employment and labor market participation of both men and women, but that the effect is significantly stronger for women, magnifying the already large gender gaps observed in LAC countries. The main channel generating this stronger impact is the increase in child care work performed by women with school-age children.

Asymmetry in childcare responsibilities is one of the main reasons behind gender gaps in the labor market. In that context, the ability to work from home may alleviate the hindrances of women with children to participate in the labor market. We study these issues in Latin America, a region with wide gender gaps, in the framework of a major shock that severely affected employment: the COVID-19 pandemic. In particular, we estimate models of job loss exploiting microdata from the World Bank’s high-frequency phone household surveys conducted immediately after the onset of the pandemic. We find that the mitigating effect of working from home on the severity of job losses was especially relevant for women with children. The results are consistent with a plausible  mechanism: due to the traditional distribution of childcare responsibilities within the household, women with children were more likely to stay home during school closures, and therefore the ability to work from home was crucial for them to keep their jobs.

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With only 32% of women in the labor market, Guatemala has one of the lowest rates of female labor force participation (FLFP) in the Latin America and the Caribbean region, and in the world. We explore information from different micro data sets, including the most recent population census (2002 and 2018) to assess the drivers of the recent progress. Between 2002 and 2018, FLFP increased from an average of 26% to 32% nationwide. This increase was partly explained by increases in the school attainment of women, the reduction in fertility and the country’s structural transformation towards services. However, a large part of the increase remains unexplained. Exploring 2018 data, we show that social norms, attitudes towards women and public policies are important determinants of FLFP. The analysis suggests that, taken together, these factors can all become an important source of increased participation of women in the labor market moving forward. 

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Link to the media: The key drivers for having more women work outside the house in Guatemala in World Bank Blogs. 

This paper assesses gender differences in the effects of adverse conditions at labor market entry in a developing region. Using harmonized microdata from national household surveys for 15 Latin American countries, we build a synthetic panel of cohorts that potentially transition from school to work and observe their labor market outcomes 10 years later. We find that men who faced higher unemployment rates at ages 18-20 suffer a negative effect on employment at ages 27-30. In contrast, women from those same unlucky cohorts have higher employment rates and earnings. Our results are consistent with women acting as secondary workers in downturns. We also find that initial labor market conditions correlate with the role played by women within the household and to perceptions about gender roles later in life. Such higher empowerment could be a result of increased female labor participation and at the same time might act as a mechanism underlying the persistence of the positive effects on female labor outcomes.

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Link to the media: Under the Spotlight, International Economic Association Blog.

We use skills surveys from 53 countries to estimate jobs’ amenability to working from home (WFH). Our measure combines data on self-reported jobs’ characteristics and home internet access into a standardized measure. We find that jobs’ amenability to WFH increases with economic development. Women, college graduates, and salaried and formal workers have jobs that are more amenable to WFH than the average. The opposite holds for workers in hotels and restaurants, construction, agriculture, and commerce. We validate our measure using longitudinal data from Chile and showing that WFH amenability correlates negatively with job losses between 2019 and 2020 and positively with the observed share of workers who worked from home in 2020. Finally, occupations explain less than one third of the variability in the WFH measure and its components, highlighting the importance of using individual-level data to assess jobs’ amenability to WFH.

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Link to the media: Will COVID-19 Increase the Jobs Divide? in Blog del CEDLAS; Who can really work from home? in Jobs and Development; Who can really work from home in MENA? in The ERF Policy Portal Forum

Work-from-home possibilities increase with the income level of countries and low-educated and low-paid workers have fewer chances of working from home. Moving to a more general work-from-home strategy in developing countries will require removing infrastructure constraints, such as lack of access to internet at home. Although working from home can improve workers’ work-life balance and job satisfaction, negative impacts on productivity and income inequality are possible. A hybrid setting, where workers can obtain the benefits of working from home some days a week and the costs can be ameliorated or avoided, is the more appropriate policy.

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The Fourth Industrial Revolution, which comprises digitization, artificial intelligence, robotics, among others, have the power to drastically increase economic output but may also displace workers. In this paper we assess the risk of automation for female and male workers in four Latin American countries --Bolivia, Chile, Colombia and El Salvador. Our study is the first to apply a task-based approach with a gender perspective in this region. Our main findings indicate that men are more likely than women to perform tasks linked to the ‘skills of the future’, such as STEM (science, technology, engineering and mathematics), information and communications technology, management and communication, and creative problem-solving tasks. Women thus have a higher average risk of automation, and 21% of women vs. 19% of men are at high risk (probability of automation greater than 70%). The differential impacts of the new technological trends for women and men must be assessed in order to guide the policy-making process to prepare workers for the future. Action should be taken to prevent digital transformation from worsening existing gender inequalities in the labor market.

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This article investigates the link between digital technologies and female labour outcomes in a country with one of the lowest female labour force participation (LFP) rates. It exploits the massive roll-out of mobile broadband technology in Jordan between 2010 and 2016 to identify the effect of internet adoption on LFP, internet job search, employment and unemployment. Using panel data at the individual level and an instrumental variable strategy, the article finds that internet adoption increases female LFP and that the effect is driven by women who were not married in 2010, who also experience declines in marriage and fertility rates in response to internet adoption. An increase in online job search explains some—but not all—of the total increase in female LFP.  Only women who are older and have higher levels of education experience an increase in employment in response to gaining internet access. The internet reduces the prevalence of traditional social norms among married women, but this channel does not explain the increase in female LFP.  

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The ability to work from home can be critical during pandemics. We calculate an index that measures the possibility of working from home based on the characteristics of the pre-Covid-19 pandemic distribution of occupations and on internet access at home, using microdata for Mexico. Focusing on households with two partners employed in nonessential occupations, we show that there is high within-household correlation in the possibility of working remotely, which is likely to be positively associated with job stability during the pandemic. Poor families, with low access to formal credit and who rely heavily on informal mechanisms for consumption smoothing have lower chances of working remotely than richer families with higher access to formal credit. High within-household correlation in the work-from-home index restricts the likelihood of intra-household risk-sharing and consumption smoothing, and is likely to contribute to an increase in inequality.

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This paper reviews the emerging literature on which jobs can be performed from home and presents new estimates of the prevalence of such jobs based on the task content of occupations, their technology requirements and the availability of internet access by country and income groupings. Globally, one of every five jobs can be performed from home. In low-income countries, this ratio drops to one of every 26 jobs. Failing to account for internet access yields upward biased estimates of the resilience of poor countries, lagging regions, and poor workers. Since better paid workers are more likely to be able to work from home, COVID-19 is likely to exacerbate inequality, especially in richer countries where better paid and educated workers are insulated from the shock. The overall labor market burden of COVID-19 is bound to be larger in poor countries, where only a small share of workers can work from home and social protection systems are weaker.  Across the globe, young, poorly educated workers and those on temporary contracts are least likely to be able to work from home and more vulnerable to the labor market shocks from COVID-19.

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We contribute to the technology, skills and jobs debate by exploiting a novel dataset for Chilean firms between 2007 and 2013, with information on the firms’ adoption of complex software used in client management, production or administration and business software packages. Instrumental variables estimates show that, in the medium run, adoption of this complex software reallocates employment away from professional and technical workers, toward administrative and unskilled workers (production and services). Adoption also increases the use of routine and manual tasks and reduces that of abstract tasks within firms. The contrast between ours and previous findings shows that labor market impacts of technology adoption hinge on the type of technology and its complementarity with the skills content of occupations.   

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Links to the media: Latin America World Bank Blog and Blog del CEDLAS.

The rapid spread of information and communication technologies may increase firms’ productivity with important consequences for job creation and for economic growth. This paper contributes to this discussion by analyzing the impact of internet adoption on labor productivity and the mechanisms shaping this relationship in Peruvian micro and small manufacturing firms over the period 2011-2013. The paper estimates a reduced form where labor productivity is a function of internet adoption and other explanatory factors. Internet adoption is instrumented using a measure of the availability of financial opportunities for micro and small firms in Peru. Findings indicate that internet adoption: (i) increases firms’ labor productivity; (ii) reallocates employment away from temporary administrative workers and non-remunerated workers and expands employment of permanent production workers; (iii) leads to the formalization of labor relationships, to the implementation of new organizational practices, and to the improvement of training measures. While changes in employment and formalization of workers are linked to labor productivity gains, increases in training measures and organizational changes do not generate any additional productivity increase. Policies oriented to promote the adoption of ICT in micro and small firms can be beneficial to close the productivity gap with larger firms in Peru. Moreover, policies directed to the formalization of the workforce can provide an extra benefit, i.e., additional labor productivity gains in firms adopting internet. Finally, policies orientated to the development of digital skills are also important to ease the re-employment of those workers losing their jobs and the achievement of additional productivity gains that new organizational practices can provide.

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This paper studies the link between trade reforms and labor informality in Argentina using a long time series spanning the 1980-2001 period. We explore cross-section mechanisms, that operate at the industry level, and time-series mechanisms, that operate at a general equilibrium level. We argue that  firms can substitute formal with informal workers to smooth a negative trade shock. In this setting, industries exposed to larger tariffs cuts could experience increases in informality. In general equilibrium, there can be additional aggregate impacts in both manufacturing and non-traded sectors through workers reallocation between sectors, wage adjustments, and  firm entry and exit. Using the cross-section variation of the data and an instrumental variable strategy we explore empirically the cross-section mechanisms. We  find that reductions in industry tariffs increase labor informality, and the effect is differentially stronger in industries with a larger share of small size firms. Using the time-series variation of the data, we are able to identify some of the general equilibrium effects. We find that the fall in the average national tariff decreased aggregate informality in the manufacturing sector but increased it in the non-traded sector.

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This paper explores microdata from Argentine household surveys to analyze how changes in the enforcement of labor regulations affect the compliance level and other labor outcomes among men and women. Using information of the highly decentralized labor inspection system in Argentina, I construct an enforcement measure with variation at the province, sector and time level (share of inspected firms) which I instrument using a measure of the arrival cost of labor inspectors to the firms. The main findings reveal that when enforcement increases, the compliance with mandated benefits and formal wages increase among men, while informal wages decline. Among women, the compliance level declines jointly with informal wages. These heterogenous impacts are explained by labor regulations that make formal and informal men more substitutable in the production process than formal and informal women. 

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Link to the media: El Economista, Blog del CEDLAS

This paper analyzes how changes in the enforcement of labor regulations impact on the compliance level in a context where the labor rules and characteristics of the labor inspection system differ by firm size. Besides the channels usually analyzed – direct effect of labor inspections and movement of displaced workers into the informal sector, the paper adds a margin of adjustment not studied before: firms can reduce their size to benefit from lower fines and less stringent regulations. The empirical findings using Peruvian data reveal little impacts of the enforcement effort on the compliance level, and a small firm downsizing effect. 

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This paper validates a recently proposed method to estimate intra-generational poverty transitions through repeated cross-sectional surveys. The technique allows the creation of a “synthetic panel” --done by predicting future or past household income or consumption using a set of simple modeling and error structure assumptions-- and thus permits the estimation of lower and upper bounds of the joint distribution of poverty and non-poverty transitions. We validate the approach in three different settings where good panel data exist (Chile, Nicaragua, and Peru). In doing so, we also carry out a number of refinements to the validation procedure and expand the set of tests undertaken. The results are broadly encouraging in estimating the joint probabilities of poverty and non-poverty transitions between two periods in all three contexts. The approach is also robust to a broad set of additional “stress” and sensitivity tests, especially in cases where richer model specifications can be estimated. Finally, we test whether the scope of synthetic panels can be expanded in three new directions, namely comparing between income and consumption welfare measures; the robustness to longer intervals (the approach does especially well in predicting long-term poverty transition patterns); and the robustness to two transition lines instead of one. Overall, the results lend support to the application of this approach to settings where panel data are absent. 

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This study draws on household survey results spanning a period of three decades in length to analyse young people's entry into the labour market in 10 Latin American countries. It finds that: (i) the employment status of young people had deteriorated over time until seeing an improvement in the late 2000s, although youth unemployment and informality rates are still very high; (ii) young people are entering into a typical employment cycle in which they are surpassing the results obtained by adults of earlier generations. Informality is not a part of this pattern, however, indicating the existence of penalties associated with youth informality. Nonetheless, the outcomes are, for the most part, promising. The author concludes that efforts to improve the position of young people in the workforce should be continued in order to sustain the recent upturn in youth employment. 

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