The pandemic and the labour market: What we know a year later

Bruno P. Carvalho, Nova School of Business and Economics and ECARES (Université Libre de Bruxelles)
Mariana Esteves, Nova School of Business and Economics
Susana Peralta, Nova School of Business and Economics

More than one year into the pandemic, employment and hours worked are still lower than in the pre-pandemic period. The average wage increased, most likely due to the destruction of precarious, low-wage jobs. Registrations in public employment centres increased, particularly in the tourist-intensive region of Algarve. Workers with less than secondary education lost 126 thousand temporary contracts and 120 thousand permanent ones, between the first quarters of 2019 and 2021. In the same period, temporary and permanent contracts increased for workers with higher education. The average weekly hours worked decreased, mainly for low-wage workers, young people, and families with children (especially single-parent households). This article uses secondary data from the Labour Force Survey, conducted by Statistics Portugal, and data on the registrations at Public Employment Offices (Instituto para o Emprego e Formação Profissional).
Key points
  • 1
       Between the second quarter of 2020 and the first quarter of 2021, the average weekly number of hours worked decreased more than 40 minutes for households with lower wages and increased almost 1 hour for those with higher wages.
  • 2
       The number of people on the job seekers’ list increased by 28% between February and December 2020, mainly due to the 30% increase in enrolments from individuals with secondary education. The increase was more pronounced (and persistent) in the Algarve region.
  • 3
       Transition from employment to unemployment or to inactivity increased between 2019 and 2020. Between the second quarters of 2019 and 2020 they were at least three times more common than between 2018 and 2019.
  • 4
       The average wage increased from 929€ to 982€, between the first quarters of 2020 and 2021. In the same period, the number of temporary contracts decreased. This suggests that the destruction of employment was concentrated in precarious and low-wage jobs.
  • 5
       In the first quarter of 2021, more than 30% of workers with higher education worked remotely, which compares to 11% and 2% workers with secondary education and basic education or less, respectively.

In the aftermath of the crisis caused by the covid-19 pandemic, several studies have quantified the unequal labour market impacts of the pandemic on temporary workers around the world. The impact of the pandemic in the Portuguese labour market is highly heterogenous across population groups. Mobility restrictions induced a shift towards remote working, which is only possible in some occupations. The prevalence of remote work is higher for individuals with higher education. In the first quarter of 2021, these individuals were three times more likely to be working remotely than those with secondary education and 21 times more likely to be working remotely than those with basic education.

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