COVID-19 and the Informality-driven Recovery: The Case of Colombia's Labor Market

September 17, 2021

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Jorge A Alvarez, and Carlo Pizzinelli. COVID-19 and the Informality-driven Recovery: The Case of Colombia's Labor Market, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper documents the impact of the COVID-19 pandemic and associated lockdowns on the Colombian labor market using household micro-data. About a quarter of employment was temporarily disrupted at the height of the first pandemic-induced lockdown in 2020. Women, the young, and the less educated were the most affected groups. Since then, a remarkable recovery, led by a rebound in informal employment, has taken place. By adjusting both employment levels and hours faster, the informal sector acted as an important margin of adjustment, particularly in those industries most affected by the first lockdown. The informal sector also appears to have played a role in decreasing the sensitivity of aggregate employment to more recent lockdowns in 2021, as the economy has learned to cope with pandemic restrictions, although the possibility of higher informality rates becoming embedded remains an substantial downside risk for long-term productivity.

Subject: COVID-19, Employment, Health, Informal employment, Labor, Labor force, Unemployment

Keywords: A. informality adjustment margin, Caribbean, Colombia, COVID-19, Employment, Impact of the COVID-19 pandemic, Informal employment, Informality., Informality-driven recovery, Labor force, Labor Markets, Offsetting policy, Pandemic-induced lockdown, Unemployment

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/235
Stock No:

WPIEA2021235
ISBN:

9781513597805
ISSN:

1018-5941

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