The Effect of COVID-19 as an Economic Shock on the Gender and Ethnic Gap in Labour Market Outcomes

Abstract

With more than 29 million confirmed cases of COVID-19 in the USA and 119 million cases worldwide, the pandemic has affected companies, households and the global economy. We explore the effect of the economic shock which resulted from this specific health event on labour market outcomes, and the changes in labour market disparities between ethnic groups and genders. The results provide evidence of an adverse effect of COVID-19 on labour market outcomes of all demographic groups, a widening gap between the employment prospects of minorities and whites, but no change in the earnings gaps between ethnic groups. We also do not find a deterioration of the differentials between genders, except the increase in the difference in the duration of unemployment between women and men with children. The findings have implications related to the priorities of policy decision-makers when implementing policies to combat ethnic and gender gaps in the labour market. JEL Classification: J70, J71, J01, J15, J23