Job and Wage Losses in Informal Sector due to the COVID-19 Lockdown Measures in India

24 Pages Posted: 27 Aug 2020

See all articles by Xavier Estupinan

Xavier Estupinan

International Labour Organization (ILO)

Mohit Sharma

Collaborative Research and Dissemination (CORD)

Date Written: August 25, 2020


This paper estimates the job and wage losses of workers, using the lens of informality, due to lockdown measures undertaken by the Government of India to tackle the spread of COVID-19. It focuses on the first two lockdowns when containment measures in India were most stringent in the world. We estimate that 104 million and 69.4 million informally employed workers were at risk of job loss in Lockdown 1.0 and Lockdown 2.0 respectively. Informal workers lost more wages, 22.6 percent, than formal workers, 3.6 percent. Workers informally employed in unorganised sector suffered a wage loss, amounting to Rs. 635.53 billion, which is almost equivalent to annual union budget allotted for employment guarantee scheme MGNERGA in 2020-2021. The prevalence of informal labour markets calls for a larger change in the social protection framework to deal with the uncertain economic situation like the one we are facing today.

Keywords: COVID-19 Pandemic, Remote Labour Index, Informal economy, Informality, Job loss, Wage loss

JEL Classification: E01, J21, J22, J31, J46, J48

Suggested Citation

Estupinan, Xavier and Sharma, Mohit, Job and Wage Losses in Informal Sector due to the COVID-19 Lockdown Measures in India (August 25, 2020). Available at SSRN: or

Xavier Estupinan

International Labour Organization (ILO) ( email )

Route des Morillons 4
Geneva, 1211

Mohit Sharma (Contact Author)

Collaborative Research and Dissemination (CORD) ( email )


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