Covid-19 Lockdown in Ecuador: Are there Gender Differences in Unemployment?

Abstract

To fight Covid-19, governments have imposed restrictions on personal mobility and social interactions which may have negative consequences in the labor market. These consequences may be different across demographic groups particularly for female workers. We examine whether the policy that restricted operations in some economic sectors affected formal employment for Ecuadorian female workers differently. We use a difference-in-differences-in-differences model to compare female employees working in restricted economic sectors with other workers, before and after the lockdown policy. The results show that the number of unemployment spells rose by approximately 15 per cent for women working in the restricted economic activities. We also document a decrease in the probability of being employed, which is particularly strong for the youngest women (15–24 years-old), oldest women (45–65 years-old), and less educated female workers. We conclude that the lockdown policy imposed in Ecuador is a plausible explanation for women’s job loss in the formal sector.

Keywords:

• Covid-19
• lockdown policy
• female unemployment
• labor market effects

JEL CLASSIFICATION CODES:

• I18
• J16
• J21
• J64

Acknowledgments

The authors wish to thank the Instituto Ecuatoriano de Seguridad Social (IESS) for providing access to data used in this document. We thank David Fielding and two anonymous reviewers for their comments, which definitely helped us improve the paper. We also thank Priscila Hermida and Borja Gambau, whose suggestions greatly improved this work. We thank the participants from the Pontificia Universidad Católica del Ecuador (PUCE) internal seminars, XXVIII Encuentro de Economía Pública, for comments and suggestions on earlier drafts. The views presented in this paper are those of the authors and do not represent those of the ESAI Business School – Universidad Espíritu Santo or its authorities.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available upon request from the Instituto Ecuatoriano de Seguridad Social (IESS – Ecuador). Restrictions apply to the availability of these data, which were used under license for this study. Replication files are available upon request by e-mail to the corresponding author.

Notes

1 For an extensive literature review of this topic, see Brodeur, Gray, Islam, and Bhuiyan (2021).

2 For an extensive review of statistics on COVID-19, see Roser and Hasell (2020).

3 This implies that we do not consider domestic workers and individuals in the agricultural and mining sectors, which pertain to a special social security scheme.

4 We use this aggregation because using the economic sectors directly at the four-digit level may generate groups with too few observations, which in the estimates may raise concerns about few observations within clusters.

5 In Ecuador, education moved online on 13th March 2020, a situation which lasted for more than a year.

6 For computation, we use the boottest Stata command (Roodman, Nielsen, MacKinnon, & Webb, 2019).

7 Table A2 in the Supplementary Materials section presents the estimates after including gender-specific linear time trends and economic sector-specific linear time trends, separately. The results are very similar.

8 The official national statistics institution of the country, “Instituto Nacional de Estadísticas y Censos” (INEC), does not publish disaggregated data on the workforce. This data is available only at the national level. In addition, to this date, we do not have access to the number of employees that contribute to social security for the periods of our analysis.

9 Though descriptive graphs are a valid tool, we have to keep in mind that they do not consider covariates or fixed effects as does a regression framework. In the supplementary materials section, we provide additional evidence that supports parallel trends.

10 As the pandemic is also very dynamic, as a robustness, we replace year and month fixed effects with month-year fixed effects. The results from this exercise are very similar and available upon request.

11 Voluntary termination occurs when an employee makes the decision to leave a job or end a contract early.

12 The ENEMDU for the period of analysis does not provide desegregation at the province level. Therefore, we can only control for the urban or rural place of residence of the respondents.

13 The periodicity of the ENEMDU survey is quarterly.

Additional information

Funding

Segundo Camino Mogro acknowledges funding from the Spanish Ministry of Economy and Competitiveness [project ECO2017-82445-R and PID2020-112984GB-C21]. Grace Armijos Bravo acknowledges financial support from Agaur Office Catalunya-Spain (FI-DGR). The usual disclaimer applies.