Abstract
We investigate how the economic consequences of the pandemic and the government-mandated measures to contain its spread affect the self-employed — particularly women — in Germany. For our analysis, we use representative, real-time survey data in which respondents were asked about their situation during the COVID-19 pandemic. Our findings indicate that among the self-employed, who generally face a higher likelihood of income losses due to COVID-19 than employees, women are about one-third more likely to experience income losses than their male counterparts. We do not find a comparable gender gap among employees. Our results further suggest that the gender gap among the self-employed is largely explained by the fact that women disproportionately work in industries that are more severely affected by the COVID-19 pandemic. Our analysis of potential mechanisms reveals that women are significantly more likely to be impacted by government-imposed restrictions, e.g., the regulation of opening hours. We conclude that future policy measures intending to mitigate the consequences of such shocks should account for this considerable variation in economic hardship.
Highlights
The unprecedented shutdown of businesses in specific industries, social distancing guidelines, and overall insecurity caused by the COVID-19 pandemic resulted in the temporary halt of major parts of the economy in many countries in 2020, with dire consequences for these economies (Milani 2021)
We investigate whether women in self-employment and among employees are more severely affected by the economic consequences of the COVID-19 pandemic and associated non-pharmaceutical interventions (NPI) than men
We show that there are significant differences in the influence of the COVID-19 pandemic and associated NPIs on the two employment forms: The self-employed are about 42 percentage points more likely to report losses of gross income than employees and 30 percentage points more likely to report a reduction in working hours
Summary
The unprecedented shutdown of businesses in specific industries, social distancing guidelines, and overall insecurity caused by the COVID-19 pandemic resulted in the temporary halt of major parts of the economy in many countries in 2020, with dire consequences for these economies (Milani 2021). While Adams-Prassl et al (2020) provide important initial evidence, they do not distinguish between self-employed individuals and employees with respect to the gender gap This is an important distinction since the labor market in Germany is characterized by stronger rigidities than other countries, limiting the extent to which firms can cut the wages of their employees (e.g., Burda 2016). These studies are hampered by limited data due to the historical nature of the event In this context, our finding that NPIs have unintended consequences for gender equality implies that this variation in economic suffering needs to be accounted for when addressing the ongoing COVID-19 pandemic or any future public health crisis involving communicable diseases of a similar or even greater magnitude. We provide a short summary of policy measures enacted in Germany in the early months of the pandemic, before we relate our study to contemporaneous research on the impact of COVID-19 on self-employment, as well as on the gender gap in self-employment
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