Despite the overall recovery of labour markets in Europe since the end of pandemic lockdowns, lingering aftershocks may be preventing immigrants and women with low levels of education from returning to work, a new WeLaR study has found.
Containment measures designed to limit the spread of COVID-19 had a devastating impact on economic performance in the Europe Union, with the food services and accommodation sector experiencing a 50% decline in hours worked during the first wave of the pandemic. By mid-2021, however, the unemployment rate in the EU had returned to pre-pandemic levels.
But recovery has been uneven, and aggregate numbers fail to capture local disparities. “We wanted to zoom in and take a more granular look at the consequences of these policies,” said Maciej Albinowski, an economist at the Institute for Structural Research, in Warsaw, and a study co-author.
To assess potential short- and medium-term effects of lockdown measures, researchers analysed Eurostat data on employment trends of various socio-demographic groups at the regional levels. To make regional comparisons, they analysed pre-pandemic and post-lockdown data on employment and activity rates, utilising employment in the accommodation and food services sector as a measure of the region’s vulnerability to the lockdown policies.
What they found was surprising. For most workers, the negative effects of COVID-19 subsided by 2022. Yet, this was not the case for immigrants and women with low educational attainment.
The employment rate of immigrants in the EU decreased in 2020 by 2.8%, a much larger drop than in the overall employment rate of 0.9%. Since then, recovery has been uneven – in 2022, employment rates for immigrants remained below 2019 levels in Bulgaria, Hungary, Poland, and Lithuania – suggesting that the pandemic influenced employment prospects long after lockdowns were lifted, the researchers found.
The response of women’s employment also varied by educational attainment, with low-skilled women being the most hard-pressed. Moreover, employment losses for women manifested as declines in the activity rate, meaning fewer women were actively working or seeking work after lockdowns were lifted.
“Our research emphasizes the importance of looking beyond the unemployment rate when analysing labour market recovery,” said study co-author Laurène Thil, a senior research associate at the HIVA Research Institute for Work and Society. “For both low-skilled women and immigrants, we observed not just negative employment effects but also a similar drop in labour market participation. This indicates a persistent detachment from the labour market, hinting at prolonged inactivity.”
Future study is needed to gauge the long-term impacts of lockdown measures, and to identify causes of these trends. The EU labour force survey’s 2022 microdata, set to be released in December 2023, could enable a more detailed examination of socio-demographic groups and effects on so-called precarious employment, the researchers wrote.
“We don’t really know why certain groups of people are choosing not to re-enter the workforce, but the data to date clearly suggests some are staying away,” said Marko Vladisavljević, co-author and professor at Faculty of Economics and Business at the University of Belgrade. “Getting a handle on the drivers of labour market upheaval may be necessary to ensure a full, post-COVID recovery.”
Albinowski,M., Thil, L., and Vladisavljević, M. (2023). The heterogenous impact of the COVID-19 crisis on labour market participation in the EU (Deliverable 4.3). Leuven: WeLaR project 101061388–HORIZON.
The paper is available here.
