Employment retention and recovery during the COVID-19 pandemic: insights from urban labour force panel data in India

This paper examines how worker characteristics, job characteristics, and government’s response in terms of lockdown stringency, health, and economic support measures are associated with employment retention and recovery in urban India during the COVID-19 pandemic, using a quarterly panel data from the nationally representative Periodic Labour Force Survey (PLFS) covering four consecutive quarters from October to December quarter in 2019 (pre-pandemic) to July to September quarter in 2020 (three consecutive quarters during the pandemic). We merge urban panel data from the PLFS with the Oxford COVID-19 Government Response Tracker’s indices, which estimate the severity of containment policies and economic support at the state level. Employing the Heckman-Probit model to correct for selection bias, our findings add to the ongoing, emerging literature on how COVID-19 impacted short-term employment outcomes in developing economies. Conditional on being employed in the pre-pandemic quarter, we find that employment outcomes in terms of retaining the job throughout the three consecutive quarters during the pandemic and recovering from a job loss by the end of the quarter ending in September 2020 were significantly shaped by gender, educational attainment, skill levels, job characteristics, and the intensity of government policy responses.