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KDI Economic Outlook 2021-1st Half
Covid-19 Shock on Employment: Gender Gap and the Implications

May 13, 2021

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KDI Report VOD
Since the outbreak of Covid-19 evolved into a global pandemic in March of 2020, more women than men have lost their jobs, especially married women.

It’s in contrast to the 1997 Asian financial crisis where married men took the brunt of the employment shock.

So, why is this happening?

On the one hand, there is the problem of labor demand as the jobs in the in-person service industry, which includes education, accommodation and food, and health and social services, and has a high share of women workers, contracted sharply during the first wave of Covid.

And on the other, there is also the problem of labor supply as a large number of women left their jobs to care for their children and homes due to the closure of schools, kindergartens, and child care facilities.

So, why is there a gender gap in the employment shock?

To answer this question, non-employed workers were divided into involuntarily laid-off workers and voluntary quitters.

Or more specifically, those who were made redundant and those who chose to leave because they could no longer work.

Following the first wave, the probability of married women being laid-off or resigning was notably higher than for men.

If it is assumed that the Covid shock was the same for all business categories,the gender gap in the probability of becoming unemployed is statistically insignificant.

It seems that the impact of the pandemic on the in-person service industry resulted in a huge loss of jobs for women.

The gender gap in the probability of becoming economically inactive remains sizable even when the business-type effect is controlled.

To find out whether this gap is due to the burden of child care on women after schools were closed,

an analysis was conducted of different age groups.

It was found that the gap was notable in groups that were assumed to have children of elementary-school-age.

In other words, it seems that this gap in economic inactivity derives from women’s reduced labor supply as they left the labor market to look after their children after the pandemic had forced schools to shut.

Compared to the job loss that men suffered during the financial crisis, the current employment shock seems to be concentrated on the female working population.
■ The Covid-19 crisis has diminished the labor demand in business areas where women are mainly engaged in, such as in-person services, and restricted the supply of married women due to the increased burden of at-home child care. As a result, the employment shock was concentrated on women rather than men, unlike in past crises.

■ It is recommended that the government should implement policy measures to resolve the challenges related to the balance between work and family, which grew more evident during the pandemic, and resulting limitations in the labor supply of women.

■ Furthermore, employment support should be also provided for laid-off workers in hard-hit sectors that were severely impacted by the labor demand shock during the Covid-19 crisis.
 
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Office of Global Economy
Providing Economic Forecast and Macroeconomic Policy Direction, the Groundwork for a Brighter Future

The Department of Macroeconomics is conducting researches on the macro economy and macroeconomic policy, particularly focusing on suggesting the analysis of macroeconomic trends and current status of the economy at home and abroad, the economic forecast, and the policy direction of the macro economy. The Department is also in charge of establishing, sustaining and maintaining various econometric models, based on which it analyses policy effects and develops a long-term economic forecast.

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