By Elissa Braunstein, Colorado State University, Elisa Calza and Alejandro Lavopa, United Nations Industrial Development Organization (UNIDO)[1]
The COVID-19 pandemic has shaken the world unlike any other crisis in recent history. During 2020, world gross domestic product (GDP) fell by 3.3%, the deepest global recession in 70 years, with an estimated loss of 255 million full-time employment jobs and an additional 97 million people falling into poverty. The effects were especially severe in developing and emerging industrial economies, which suffered an average estimated output loss of 7.7% compared to 3.9% for industrialised economies, according to the UNIDO Industrial Development Report 2022. Within countries, SMEs were more likely to shut down operations than large firms and suffered larger declines in sales and profits. Across workers, women experienced greater labour-market losses than men.
Gendered impact of COVID-19 pandemic on labour markets
Between 2019 and 2020, average women’s labour-force participation in emerging and developing economies fell by 6.1% – a decline that was 50% higher than for men, according to data from the International Labour Organization. Even more dramatic was the decline in the employment-to-population ratio for women, which fell by 7.8% (Figure 1). As a result, the women-to-men employment-to-population ratio dropped by 1.7 percentage point (from 70.5% to 68.8%) over the course of 2020.
FIGURE 1. Changes in labour-force participation and employment-to-population rate by gender, 2019-2020
Source: Braunstein (2021) based on labour-force statistics from ILOSTAT (September 2021).
Note: Data from 30 developing and emerging industrial economies considered.
Between 1991 and 2019, women’s employment rate relative to men’s had increased by 5.0 percentage points on average; the decline observed in 2020 thus undid about a quarter of the progress achieved in the last 30 years. If this trend is not reversed, it could lead to a loss of about a decade of progress on gender equality in employment.
Analysis of gender-disaggregated data collected by a UNIDO firm-level survey on the impact of the COVID-19 pandemic shows that, due to layoffs, the average number of women workers fell more than the number of men workers among permanent and – in particular – temporary workers (Figure 2). It also reveals that women faced disproportionate risk of job loss in response to a decline in sales (elasticity of employment with respect to sales) compared with men workers: for every 1% decline in sales, jobs decreased by 0.73% for women and 0.68% for men. This difference implies a gender gap in the risk of job loss equal to 0.05 percentage points. Women temporary workers faced an even high risk with a gender gap in the risk of job loss equal to 0.44 percentage points.
FIGURE 2. Drop in employment: temporary and permanent workers by gender, 2019-2021
Source: UNIDO Industrial Development Report 2022
Note: Sample considers manufacturing firms from 26 developing and emerging industrial economies.
Why were women workers more affected?
Demand- and supply-side factors come together to explain the higher vulnerability of women workers during the COVID-19 pandemic. On the demand side:
- Due to gender segregation in the labour market, women workers are concentrated in the sectors that were hit hardest by lockdowns and closures. Within manufacturing, women working in export-oriented production were at particularly high risk of job loss as a result of supply chain disruptions and the slowdown in global trade triggered by the pandemic.
- Women tend to rely more than men on informal industries, small enterprise and self-employment activities, which are typically more exposed to economic shocks.
- Gender norms and stereotypes affect the distribution of economic distress as job scarcity increases: they contribute to employers seeing women as more likely to be secondary earners for households and thus easier to lay off to accommodate changes in labour demand.
Turning to supply-side factors:
- Women’s disproportionate responsibility for unpaid care work meant that they bear most of the burden of the increased need for care induced by the pandemic (i.e. school and childcare closures, the need to care for the sick).
- Women’s short-term withdrawal from the paid labour force might lead to longer-term “labour market scarring.” This increases the risk of progressive deterioration of women’s skills due to unemployment and lack of training, with possible consequences in terms of permanent loss of income, poverty and inequality.
Towards gender-inclusive industrial policy
The deterioration of gender equality in labour markets is highly concerning and threatens to compromise achieved and future progress towards Sustainable Development Goal (SDG) 5, turning the short-term effects of the pandemic into long-term consequences for women. Industrial policies should aim at ‘building forward better’ by addressing the risk of reversing progress made on social and inclusiveness indicators, such as SDG 5. The post-COVID-19 scenario offers opportunities for a more gender-inclusive industrial development, which could be achieved through three guiding principles for industrial policy:
- Bring a gender-aware perspective to employment challenges of increasing technological intensity and automation in industry, by ensuring that women workers participate and benefit from better-paying jobs, and offering women opportunities to upgrade their skills and capabilities.
- Create targeted growth of green jobs that tap into women’s potential to become key agents of change and drivers of a green transition, thus supporting women-led innovation and entrepreneurship.
- Acknowledge the contribution to socio-economic development represented by the care work typically undertaken by women, by identifying spending on social services, social infrastructure and the care economy as investments and as part of industrial policy.
[1] This post is based on the paper by Elissa Braunstein, Gender and the future of industrialization in a post-pandemic world, which was prepared for the UNIDO Industrial Development Report 2022.
The views expressed are those of the authors and do not necessarily reflect the views of UNIDO or other organizations the authors are affiliated with.