The Long Downturn: The Impact of the Great Lockdown on Formal Employment

29 Pages Posted: 15 Oct 2020 Last revised: 31 Dec 2020

See all articles by Lauren Hoehn-Velasco

Lauren Hoehn-Velasco

Georgia State University - Andrew Young School of Policy Studies

Adan Silverio-Murillo

School of Government, Tecnologico de Monterrey

Jose Roberto Balmori de la Miyar

University Anahuac Mexico, Business and Economics School

Date Written: October 1, 2020

Abstract

In this paper, we use administrative data covering Mexico's formal labor market to investigate the employment effects of the Great Lockdown (GL). Our results show that the COVID-19 pandemic and lockdown caused Mexico's formal sector to contract by 5% by November of 2020. By August, men's jobs started to recover, while women's jobs remain stagnant. We then document heterogeneous effects by age, income, size of the firms, and economic sector activity. The most affected economic agents during the pandemic include the youngest workers (15 to 29-years-old), oldest workers (over 60 years old), low-income earners, small-sized firms (6-50 workers), medium-sized firms (51-250 workers), workers in the construction industry, and the hospitality-focused service sectors. Finally, we test different state-level factors that may explain heterogeneity within Mexico: state-level reopenings and lockdowns, infection risk, and stimulus payments. Our findings suggest more considerable employment losses in states that experienced successive lockdowns.

Keywords: COVID-19, Labor, Latin America, Mexico

JEL Classification: J21, J63, J64

Suggested Citation

Hoehn-Velasco, Lauren and Silverio-Murillo, Adan and Balmori de la Miyar, Jose Roberto, The Long Downturn: The Impact of the Great Lockdown on Formal Employment (October 1, 2020). Available at SSRN: https://ssrn.com/abstract=3711367 or http://dx.doi.org/10.2139/ssrn.3711367

Lauren Hoehn-Velasco (Contact Author)

Georgia State University - Andrew Young School of Policy Studies ( email )

Department of Economics
35 Broad Street, 6th Floor
Atlanta, GA 30303-3083
United States

Adan Silverio-Murillo

School of Government, Tecnologico de Monterrey ( email )

Calle del Puente 222
Mexico City, 04210
Mexico

Jose Roberto Balmori de la Miyar

University Anahuac Mexico, Business and Economics School ( email )

Av de las Torres 131
Olivar de los Padres
Mexico City, Mexico City 01780
Mexico

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