Impact of vaccine inequity on the labour market
Published on 25 February 2022. Click here for previous version from April 2021
Overview
Countries with high vaccination rates are nearing full recovery while countries where vaccination rates are low are struggling to reopen their economies. This is particularly problematic for informal workers for whom extended lockdowns equate to job losses.
Global employment recovery over the course of 2021 has been very uneven due to inequities in vaccine access, fiscal support and social protection.[1] Data on working hours lost due to COVID-19 shows that, at the end of 2021, an estimated 95 million jobs were yet to be regained, compared to late 2019.[2]
Recovery trajectories vary significantly between countries of different income groups, depending on their vaccination progress. As high-income countries progressed towards achieving very high vaccination coverage, they were able to lift containment measures and open workplaces, which in turn enabled them to make significant advances towards recovering their workforces. Meanwhile, low vaccine access hampered labour market growth in low- and lower-middle income countries, as they suffered repeated setbacks over the course of 2021.
Yet additional analyses beyond the loss of working hours, which mainly focus on the formal employment sector, are needed to fully understand the impacts of COVID-19 on the labour market. One of the main reasons for the high vulnerability of informal workers is that the sectors in which they often work have been hit the hardest by lockdowns: wholesale and retail trade, manufacturing (non-agriculture), and hospitality services, among others. Since a majority of informal jobs are not flexible to remote work, extended lockdowns equate job losses for these workers. Nearly two years after the initial impact of COVID-19, when the earnings of approximately 1.6 billion informal workers declined by 60 percent due to lockdown measures[3], global informal employment still has a long way to recover— as of early 2022, it is still 8 percent lower compared to the beginning of the pandemic.[4]
Data from the Dashboard reveals a strong relationship between the trajectories of vaccination rates and lockdowns. Comparison of the stringency index (a composite index that measures country-level lockdown measures) and vaccination rates, shows that countries with higher vaccination rates are gradually reopening while countries where vaccination rates are low are keeping lockdown measures in place while struggling to reopen their economies.
Moreover, some countries with a large informal sector like Uganda experienced a significant increase in the number of days of complete lockdown compared to 2020, as well as Bangladesh and Colombia, before they reached higher vaccine coverage. This is particularly problematic for informal workers who depend on daily wages.
Formal income support policies to people who lose their employment are also less accessible to informal workers which further exacerbates the socioeconomic impacts of the pandemic. Throughout 2020 and 2021, governments in upper-middle and high-income countries were able to provide more comprehensive and longer-lasting economic support to both formal and informal workers, who lost their employment, than lower-income countries. In addition, low-income countries were the only income group for which the average duration of economic support declined between 2020 and 2021.
Low vaccination coverage and the limited ability of lower-income countries to provide comprehensive social protection packages further compound preexisting vulnerabilities and are likely to have a significant disruptive effect on their recovery. Urgent action is required to support vaccination campaigns—from financing to last mile delivery—to move closer to an equitable global recovery.
References
[1] ILO Monitor: COVID-19 and the world of work. Eighth edition
[2] Working hours lost due to the COVID-19 crisis – ILO modelled estimates (%) - Annual
[3] Impact of lockdown measures on the informal economy - A summary