Employment inequality in India during the pandemic

• DOI: https://doi.org/10.1108/EDI-06-2021-0146
• Published date: 18 March 2022
• Date: 18 March 2022
• Pages: 831-846
• Subject Matter: HR & organizational behaviour,Employment law,Diversity,equality,inclusion
• Author: Diti Goswami,Sandeep Kumar Kujur

Employment inequality in India

during the pandemic

Diti Goswami

Humanities and Social Sciences, Indian Institute of Technology Delhi,

New Delhi, India and

Centre for Sustainable Employment, Azim Premji University, Bengaluru, India, and

Sandeep Kumar Kujur

Institute of Public Enterprise, Hyderabad, India

Abstract

Purpose –The coronavirus disease 2019 (COVID-19)-induced response policies initiated by the Indian states

disproportionately impact the employment of different groups in terms of gender, caste and religion. This

study analyses the impact of the COVID-19-induced labor policies on employment inequality across different

groups in India.

Design/methodology/approach –The authors identify different exogenous COVID-19-induced labor

policies initiated by the Indian states, and synthesize them into direct and indirect labor policies. The authors

employ a panel model to examine the impact of COVID-19-induced labor policies on employment inequality.

Findings –The authors find that the direct and indirect labor policies induce a decline in the employment rate,

and create employment inequality among gendered and religious sub-groups. Females and Muslims have not

significantly benefited from the COVID-19-induced labor policies. However, disadvantaged caste groups have

benefited from direct and indirect labor policies.

Research limitations/implications –The time period during which this research was conducted was quite

brief, and the qualitative impact of labor policies on employment inequality has not been accounted for.

Practical implications –This study unravels the distributive impact of the COVID-19-induced direct and

indirect labor policies on the well-being of vulnerable laborers.

Social implications –The study provides novel empirical evidence of the beneficial role of a proactive

government. This study’s findings suggest the need for specific distributive labor policies to address

employment inequality among gender and religious groups in India.

Originality/value –The study employs new data sources and synthesizes the COVID-19-induced labor

policies into direct and indirect labor policies. In addition, the study contributesto understanding the impact of

COVID-19 induced direct and indirect labor policies on employment inequality across gender, caste and

religious sub-groups in India.

Keywords COVID-19 crisis, Direct labor policies, Indirect labor policies, Employment rate, Employment

inequality, Indian states

Paper type Research paper

Introduction

Countries across the globe have adopted multiple policies to sustain income during the

coronavirus disease 2019 (COVID-19) crisis, depending on the fiscal capacity, population

structure, size of the informal sector, healthcare infrastructure and the percentage of people

below the poverty line (Adam et al., 2020;Alderman and Harjoto, 2021;Casale and Posel, 2020;

Gerard et al., 2020;Gonz

alez-Bustamante, 2021;Lim et al., 2020). Countries all over the world

have also initiated labor policies to improve employment (Brewer and Gardiner, 2020;

Mayhew and Anand, 2020;Zhnag, 2020;Kesar et al., 2021;Miyamura, 2021). As a developing

economy with a significant presence in the informal sector (Kesar et al., 2021), India has

initiated labor policies to secure the livelihood of the laborers during the pandemic.

Considering the heterogenous economic activity and variation in labor force composition

across India, the state governments, under the federal framework, have initiated several labor

policies in response to the COVID-19 pandemic (Kujur and Goswami, 2020). These policies

disproportionately impact the employment of different groups in terms of gender, caste and

Employment

inequality in

India

831

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/2040-7149.htm

Received 5 June 2021

Revised 24 November 2021

1 February 2022

Accepted 3 March 2022

Equality, Diversity and Inclusion:

An International Journal

Vol. 41 No. 6, 2022

pp. 831-846

© Emerald Publishing Limited

2040-7149

DOI 10.1108/EDI-06-2021-0146

religion in India (Desai et al., 2021;Kesar et al., 2021). Therefore, the present study analyses

the impact of the COVID-19-induced labor policies on employment inequality across different

groups in India. This will be of particular interest to policymakers tasked with providing

equitable welfare gain during the COVID-19 crisis.

We use novel datasets and employ p anel regression models to anal yze the impact of

COVID-19-induced exogenou s labor policies on employment inequality. Using information

from the International Labor Organisation (ILO, 2020), we identify and sy nthesize the

COVID-19 induced labor policie si nto (1) direct labor policies and (2) indirect labor policies.

This classification is motivat ed by the existing literature th at analyses several direct and

indirect policies. For instan ce, direct and indirect colonial rule ( Iyer, 2010), direct and indirect

social spending policy (Fari cy, 2011;Careja et al.,2016),direct and indirect ta x policy (Saez,

2004;Savage, 2017), direct and indirect support programs for the industrial cluster

(Nishimura and Okamura, 2011 ). Direct labor policies are designed and imple mented by the

government to directly imp rove the well-being of the la borers. These policies foc us

primarily on securing the liv es of the laborers through the provi sion of healthcare, providing

food and income support, ens uring the human rights of the la borers and protecting the

migrant laborers. The stat e’s indirect labor policies encourage the ot her players in the labor

market (for instance, employ ers, manufacturers, lessors) to secure the lives and ensu re the

livelihood of its laborers during the pandemic.The direct labor policies include the supply of

free food, minimum income suppor t, advance payment of welfare pension, transportations

for migrants; free testing ,s creening and quarantining of the migrants; insuran ce coverage

for the health and other frontl ine workers; ex-gratia for th e kin of those die while dealing

with COVID-19. These policie s are in the form of direct welfare tr ansfer or support to the

laborers. On the other hand, the indirect labor policies support the laborers by providing

training to paramedical, nu rsing and other healthcare providers, s kill mapping of the return

migrants, creating labor exchange commission to facilitate the job seekers, providing

employment under MGNREGA, allowing extended hour shifts in the factories,waiving off

rent for the startups, a mora torium on rent for various sectors. These measures in directly

support the laborers throu gh different market channel s and improve their welfare. T he

illustrative table of COVI D-19-induced direct and indirect lab or policies adopted by different

Indian states is provided in A ppendix Table A1.

The direct and indirect labor p olicies adopted by the Indian s tates exhibit temporal

variation. During the beginn ing of the nationwide COVID-19 lockdown in March and Apr il

2020, most Indian states hav e initiated direct labor measures to provide immed iate welfare

support like free food, shel ter and income through direct transfer to th e vulnerable workers.

The government has also adopte d measures to safeguard the wor kers’health by testing,

screening and quarantinin g. Later in May and June, the government adopted several oth er

direct measures to protec t the health of the workers by ordering the hospitals a nd nursing

homes to form COVID-19 treatm ent wards, fixing price ceili ng on the private hospitals

treating COVID-19 patients , and supporting the frontl ine workers by providing life

insurance cover. After secur ing the health and essential n eeds of the laborers, the states

initiated other direct poli cies to stabilize their incom e through various measure s like

financial relief to the farmer s, incentives to Accredite d Social Health Activist (ASHA )

workers, and financial ass istance to informal worker s. In addition to these COVI D-19-

induced direct labor policie s, the states have initiated n umerous indirect labor poli cies

during March–June 2020. In the ini tial phases, the states facili tated the training of

paramedical, nursing and oth er healthcare professional s to prepare for the pandemic. The

states have also adopted mea sures to indirectly sustain the income flow of the wo rkers by

ordering the timely and advan ce payment of salary, pens ions and paid holidays for the

workers during the lockdown .L ater in May and June, to address the labor shorta ges caused

by the lockdown, the states ini tiated various policies like fiscal incentives to the firm s and

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