The disproportionate effect of COVID-19 on the labour market in South Korea

Abstract

COVID-19 delivered distributional effects on the labour market. Therefore, policymakers concentrated on designing more efficient and effective fiscal supports to alleviate economic damages. To draw more specific pictures, this study estimates who faced harder impacts and how much they experienced economic difficulties in Korea using unconditional quantile regression and separating vulnerable sectors, such as face-to-face industries. The findings suggest that self-employed workers in the vulnerable industries at low-income percentiles presented the most severe damages. Second, self-employed workers in other sectors, temporary workers in the vulnerable industries, and low-income households also had serious impacts. Third, female workers, who have a primary child-care duty, experienced serious negative effects due to the regulation disparity between strict school closure measures and generous workplace restrictions. In this regard, financial supports should aim to target more damaged groups instead of universal benefits. Furthermore, it is also important to improve child-care services to mitigate gender inequality.