COVID-19 Employment Shock Hits 'Elementary School Working Moms' Directly... "Policy Response Needed"

KDI Publishes Report on 'Gender Gap in COVID-19 Employment Shock and Implications'
Controlling for Industry Effects, Employment Market Exit Most Pronounced Among Women Aged 39-44

[Sejong=Asia Economy Reporter Kim Hyun-jung] An analysis has been raised that women with elementary school children have been the most affected in the labor market due to the increased burden of childcare caused by school closures amid the spread of COVID-19. This phenomenon, combined with the fact that the proportion of men working in face-to-face service industries has decreased due to reduced labor demand, shows a different pattern from past economic shocks such as the IMF foreign exchange crisis, when large-scale unemployment occurred mainly among male manufacturing workers.

On the 22nd, Kim Ji-yeon, a research fellow at the Economic Strategy Research Department of the Korea Development Institute (KDI), released a report titled "Gender Gap in Employment Shock from COVID-19 and Its Implications," presenting research results that the increase in childcare at home due to school closures was one of the main factors limiting women's economic activities. Preliminary analysis and comparison showed no gender gap in employment shock between unmarried men and women, so only data related to married men and women were used in the analysis.

Researcher Kim divided the causes of the gender gap in employment shock after COVID-19 into labor demand and supply factors. On the demand side, since women constitute a high proportion of workers in face-to-face service industries, where demand itself shrank due to the COVID-19 shock, the impact on female employment was naturally greater. In fact, before the crisis in the top three industries most affected by COVID-19 employment shocks (education, accommodation and food services, health and social welfare services), the proportion of female employees (38%) in January 2020 significantly exceeded that of male employees (13%).

Examining changes in employed persons to unemployed or economically inactive populations, the probability of job loss for married female employees increased from 0.75% before the spread of COVID-19 (January) to 1.39% after the spread (March), a larger increase than that of men (0.65% → 0.68%). The difference between unemployed and economically inactive populations lies mainly in the willingness to re-enter employment after job loss. Changes to economically inactive populations also rose from 1.67% to 5.09% for women during the same period, while for men it increased only from 1.15% to 3.09%. Regarding this, Researcher Kim said, "This suggests that both labor demand and supply factors played important roles in the gender gap in employment shocks."

Since gender differences in employment shocks can vary depending on the proportion of workers by industry, a more refined analysis was conducted by separating industry effects reflecting labor demand, which also showed greater employment shocks for women. The probability of employed persons becoming unemployed was 0.6 percentage points higher for women than men before controlling for industry effects, but after controlling, it was only 0.3 percentage points and not statistically significant. For those moving to economically inactive populations with no intention of re-employment, the gender difference was 1.48 percentage points before industry control and 1.00 percentage points after. Researcher Kim explained, "This means that differences in industry alone cannot explain women's withdrawal from the labor market."

Meaningful figures were found in the process of analyzing the assumption that this "unexplained" gender gap is due to increased childcare at home caused by school closures. Based on the average age of childbirth from the Statistics Korea population trend survey, estimating the presence and age of children, it was confirmed that women aged 39-44 suffered the greatest impact.

After controlling for industry, the gender gap in the probability of employed persons moving to economically inactive populations was 1.20 percentage points for ages 32-38, 1.70 percentage points for ages 39-44, and 0.70 percentage points for ages 45-54. Regarding this, Researcher Kim said, "The relatively large increase in the probability of employment to economic inactivity for women aged 39-44 suggests that school closures were one of the main factors limiting women's economic activities," emphasizing, "These results are consistent with overseas prior studies using child age data."

Researcher Kim viewed that active government policy implementation is necessary to resolve the gender gap issue in employment shocks. He said, "Early career discontinuation for women leads to permanent loss of human capital, which can act as a factor hindering economic productivity and vitality even after the COVID-19 crisis ends," stressing, "Social support for childcare is needed to prevent restrictions on women's labor supply due to increased childcare burdens." He added, "The fact that labor supply decreased most significantly among women estimated to have elementary school children suggests that current childcare support policies, which focus on infants and toddlers, need to be restructured to sufficiently cover children of elementary school age and above."

Along with this, he also saw the need to provide employment support for unemployed workers in sectors severely affected by labor demand shocks such as face-to-face service industries during the COVID-19 crisis. He proposed, "It is necessary to establish a system to support economic agents who lost jobs due to the temporary shock of COVID-19 to smoothly re-enter employment," and added, "Furthermore, as economic structural transformation such as acceleration of the digital economy is expected due to the COVID-19 crisis, continuous efforts to strengthen vocational training are needed so that the unemployed can move to and adapt to new promising industries."

This content was produced with the assistance of AI translation services.