The economic consequences of the coronavirus pandemic: which groups will suffer more in terms of loss of employment and income?

Abstract

The paper estimates the scale of the possible impact of the coronavirus epidemic on the Russian labor market and household incomes. We consider vulnerable employment, which includes workers with increased risks of job loss, wage cuts and other negative events that reduce labor incomes. The analysis shows that every second Russian worker can be classified as vulnerable employee. The highest risks for reducing labor incomes as a result of the epidemic are faced by young people, workers with a low level of education, as well as residents of regional centers. About a third of vulnerable employees experience complex vulnerability, i.e. meet several criteria of vulnerability. A decrease in labor incomes could also affect the wealth of about 40% of Russian households. The worst situation is for younger families, whose incomes are much more dependent on the labor market. Most of the households in which vulnerable workers live do not receive social benefits, and therefore it would be rather difficult for them to count on prompt assistance from the social protection system. Currently Russia is actively developing a set of measures to support employment. In particular, government decided to provide support for the most affected by COVID sectors, the size of unemployment benefits has been increased for citizens who have lost their jobs due to the epidemic. However, it is obvious that this list should be extended and account for various forms of deterioration of employment.