This article assesses the impact on the labour market of the lockdown measures adopted by the majority of European Union countries to try to contain the spread of coronavirus. These measures are similar across most of them, although their impact varies, among other reasons, because of the design of the institutions and  characteristics of the production structures of each country. Furthermore, the crisis is unequal in the way it affects different groups of workers. It is affecting countries like Spain, the United Kingdom and Italy more severely and, within the national sphere and in a generalised way, it has a much greater impact on the most vulnerable workers, as we detail below. 

To evaluate the impact of the crisis on the labour market, we have extracted relevant information from the legislation passed by Spain, Italy, and Germany to implement measures for lockdown and the restriction of economic activity. We have used this information as a basis to identify essential and nonessential sectors. Secondly, we have identified activities directly suspended in the decrees because they entail some special risk for public health (insofar as they require direct contact with the public). Finally, we have classified the sectors according to the possibility of teleworking. With these criteria we have generated five categories of sectors, characterised according to the way in which they are affected by the measures:

1. Essential and fully active: production of food and drink, activities of health professionals, supply of electricity and gas, etc.
2. Active via telework: education, scientific and professional activities, etc.
3. Mostly essential and partly active: services such as retail sales, the production of chemical products and of paper, etc.
4. Mostly nonessential: those where activity is permitted only if additional precautions are adopted such as various nonessential industrial activities, the repair of machinery and computers, construction, etc.
5. Suspended: restaurants, hotels, cultural activities, etc.

This classification has been applied to an ad hoc extract of the European Active Population Survey (with annual data from 2018), so that we can compare the proportion of employment potentially affected (and not affected) in different countries, and crossing those categories with the information from some sociodemographic variables. In this way we are able to sketch a profile of those workers who are more and less affected by the current crisis.

It seems reasonable to expect that countries with a higher proportion of jobs in those sectors suspended due to restrictions on activity will suffer a greater impact. Across the whole of the European Union, this category represents nearly 10% of employment, but there are important differences between countries. Thus, in the case of Spain, the figure rises to 14.2%, and other countries from the south of the European Union also score higher than the European average.

The main factor that explains these differences is the economic and productive specialisation of each country. In the Member States situated in the south of the European Union, those jobs in activities related with leisure, personal services, and tourism, as well as other activities highly affected at present, have a comparatively high prevalence. Furthermore, in these countries there is more self-employment and a larger number of temporary job contracts, which could aggravate the negative effects of suspending activity. In contrast, Member States in the centre and north of the European Union have a higher proportion of employment in active sectors (because they are considered essential or the work can be done remotely), therefore they are less exposed to the negative consequences of the current crisis.

As for the prevalence of teleworking by countries and sectors, in general, and prior to the crisis, certain countries (such as the Netherlands, Finland, and Luxembourg) already had a higher level of teleworking than the European average. This fact is important because, in principle, it makes them better prepared for the mass transition to teleworking triggered by the crisis. Unfortunately, some of the countries where the prevalence of teleworking was smaller are, once more, those most affected by the pandemic (including Spain and Italy).

Analysis of the sociodemographic composition of the sectors defined enables evaluation of the implications of the crisis from the inequality angle. Table 1 shows, on average, where the wages of the jobs that make up each category stand (on a scale from 0 to 100): the highest wages are to be found in the teleworkable sector and the lowest in the suspended sector. To put it another way: in Spain, on average, a worker from a sector that has been suspended earns a lower income than the incomes from nearly 70% of jobs.

This table includes the most representative variable of all those analysed, which is illustrative in itself and because wages are a good estimate of employment quality. This analysis would allow us to extrapolate, based on the patterns that we are viewing, and get a broader idea of the type of jobs that make up each category. The same exercise can be considered with variables referring to gender, age, employment type and level of qualifications in each sector (as has been done in the full report). All of these data, taken as a whole, indicate that the effects of lockdown measures are clearly asymmetrical. The crisis is not only affecting more acutely those people who earn less income, but furthermore:

• In the majority of countries there are more women than men in the sector suspended by the crisis.

• The sector suspended by the crisis measures has a very high proportion of young workers, while the proportion of young people in the sectors least affected by the crisis is very low. In contrast, more veteran workers are over-represented in the essential and active sector, which implies that in employment terms they are less affected than young workers. However, this could be problematic from the healthcare angle, as it is a higher-risk group, not only due to age, but because it is more exposed to contagion of the disease in the workplace.

• Both self-employment and temporary employment contracts (table 2) are especially common in the suspended sector, although there are important differences between countries. These forms of employment, associated with precarious employment, are more common in the countries of the south and the centre and east of Europe.

• There is a clear pattern in all countries that shows that the majority of workers in teleworkable sectors are highly qualified, whereas workers with low qualifications are distributed more evenly among the rest of the categories.

In summary, the lockdown measures, requiring obligatory compliance in order to halt the progression of the greatest public health problem that we have faced in a long time, are having an inevitable impact on the labour market. Data from this and other studies indicate that this impact is not symmetrical. To the contrary, the negative effects of the crisis are concentrated on the most vulnerable and disadvantaged workers. Specifically, those activities that are considered nonessential and that have been suspended (personal services, hospitality, etc.) are characterised, in all countries, by offering lower salaries and employment conditions that are more precarious than the rest, as well as having a higher concentration of women and young workers.

Moreover, it is expected that the impact of the lockdown measures on the labour market will be stronger in some countries in the south of the European Union. Despite it being a crisis this time whose causes lie outside of politics, the result is that these countries have been severely hit by a double whammy in a very short space of time.

This article summarises the main conclusions of a report recently published by the European Commission Joint Research Centre: M. Fana, S. Tolan, S. Torrejón, C. Urzi Brancati, E. Fernández-Macías: “The COVID confinement measures and EU labour markets”, EUR 30190 EN, Publications Office of the European Union, Luxembourg, 2020