The impact of COVID-19 on employment expectations in the China’s service sector—evidence from online surveys of 1222 education enterprises

ABSTRACT

This paper uses data from 1,222 online survey questionnaires of education enterprises to estimate the impact of COVID-19 on the employment expectations of service enterprises. We found COVID-19 had a significant inhibitory effect on employment expectations, and if the shock of COVID-19 increased by one level, the probability that the expected labour demand of enterprises decreased by 30–50% would increase by 0.049 compared to the same prior-year period, and the probability of a reduction of more than 50% would increase by 0.115. The COVID-19 influenced employment expectations mainly through inhibiting two major channels – revenue and cash flow, and its impact on revenue was greater than the impact on cash flow. Specifically, the mediating effects of revenue and cash flow accounted for 42.78% and 14.07% of the total effect, respectively. In addition, the employment expectations of non-micro enterprises, offline enterprises, and enterprises in high-risk regions were more impacted by COVID-19.

KEYWORDS:

• COVID-19
• service sector
• China’a education enterprises
• employment expectations
• mediating effect

JEL CLASSIFICATION:

• C42
• C51
• J21
• L29
• L89

Disclosure statement

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

Additional information

Funding

This work was supported by the Education Foundation of Beijing Normal University and TAL Education Group under Grant [TAL2020003].