Kanika Mahajan
Ashoka University
Ishaan Bansal
Working Paper
JEL Codes:
J16, J22, J23
● COVID-19, Income Shocks and Female Employment
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Existing evidence shows that the Covid-19 pandemic has led to employed women witnessing larger losses in the labor market in India. We examine the heterogeneity thatunderlie these trends by studying the impact of Covid-19 induced income shocks onfemale employment. Using individual level panel data and a difference-in-differencesstrategy that exploits lockdown timing (April 2020) and accounts for seasonal employment trends, we find that women in households facing a hundred percent reduction inhousehold male income during the lockdown were 1.5 pp (25%) more likely to take upwork during the unlockdown months (June-August 2020). We also find these resultsto be predominant in poorer and less educated households. However, these positiveemployment trends are only transitory in nature with a reversal in female employmentin these households from September 2020 onwards. These findings underscore the useof womens labor as insurance during low-income periods by poorer households.

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