COVID-19 cut work hours, changed labor market

By Francis Allan L. Angelo

The COVID-19 pandemic significantly disrupted the labor market in the Philippines, leading to notable changes in working hours and employment patterns.

A recent study by the Philippine Institute for Development Studies (PIDS) revealed that the reduction in working hours across the country amounted to approximately two months of full-time work, primarily due to adjustments in existing work schedules rather than widespread job losses.

These findings were presented by Dr. Ma. Christina Epetia, a former Research Fellow at PIDS, during a public webinar.

Her study, “Where Have the Workers Gone since the COVID-19 Pandemic?” co-authored with Research Specialist John Joseph S. Ocbina and Senior Research Specialist Kimberly R. Librero, examined shifts in annual work hours and workforce reallocations prompted by the pandemic.

Epetia noted that the pandemic caused significant shifts in the Philippines, affecting various sectors, occupations, and demographic groups differently.

“In countries like the Philippines, initial working hour reductions were primarily intensive adjustments,” Epetia explained.

She highlighted that workers’ hours were reduced rather than losing their jobs entirely, noting a temporary reversal of the gender gap in work hours as men initially experienced larger declines. By 2021, men’s work hours began recovering faster, narrowing the gender gap again.

The study also illuminated significant labor market reallocations, with a historic decline in labor force participation reported by the Philippine Statistics Authority (PSA).

While some workers transitioned to growing sectors, informal employment surged, eroding pre-pandemic gains in formal job sectors. This coincided with rising unemployment and underemployment rates, underscoring substantial losses in jobs and working hours.

Despite partial recoveries in labor force participation and employment rates since 2020, slower recuperation in working hours persisted, predominantly due to intensive margin adjustments.

Epetia emphasized the need for a robust unemployment insurance system and enhanced social safety net, particularly for vulnerable groups facing involuntary reductions in work hours.

“It would be important to identify which groups are experiencing involuntary reductions in hours of work, especially those paid by the hour or day,” she added.

Discussant Dr. Geofrey Ducanes of Ateneo de Manila University highlighted emerging post-pandemic trends, noting a rise in remote work and gig employment.

“More people are now working from home, either full-time or part-time. They may be part of the formal economy but are working remotely,” he stated. He pointed out the gap in PSA’s labor force survey in fully capturing these shifts, particularly in assessing gig work and informal employment.

Meanwhile, International Labour Organization Senior Economist Dr. Stefan Kühn emphasized global parallels, cautioning against simplistic interpretations of employment shifts based solely on occupation structures.

“When you look at the employment shares, you see an apparent shift of employment shares towards occupations that were less affected, but it doesn’t mean that a single worker moved into those occupations,” he clarified.

Kühn advocated for deeper analyses into the long-term pandemic impacts on structural transformations within the Philippine labor market.

Updating from PSA’s latest labor force survey in April 2024, Department of Labor and Employment Bureau of Local Employment Labor Market Information Division Chief Ms. Grace Baldoza affirmed progress beyond pre-pandemic levels despite lingering challenges in unemployment and underemployment.

She emphasized the sustained efforts and collaborative initiatives to uphold individual well-being and prioritize lifelong learning beyond conventional employment metrics.

REBOUNDS AND SHIFTS

The COVID-19 pandemic caused a historic disruption to the Philippine labor market, marked by a dramatic drop in labor force participation, soaring unemployment, and increased underemployment.

However, as mobility restrictions eased and policies were implemented to mitigate the pandemic’s impact, signs of recovery have emerged, albeit with some persistent challenges.

According to the PIDS study, the labor force participation rate has rebounded, surpassing pre-pandemic levels by the end of 2022.

The unemployment and underemployment rates have also returned to their pre-pandemic figures.

Despite this positive trend, average weekly hours of work remain lower than before the pandemic, indicating that people are working less on average.

The pandemic led to significant shifts in employment shares across various sectors and occupations.

Initially, there was a rise in agricultural employment as industry and services sectors saw declines.

However, by late 2020, sectoral employment shares began reverting to pre-pandemic trends.

The study highlighted that the decline in average hours of work before the pandemic was primarily due to reduced hours among the employed (intensive margin), whereas during the pandemic, the change at the intensive margin became more pronounced.

GENDER DISPARITIES IN EMPLOYMENT

Gender disparities in employment dynamics have also been observed. While men’s employment shares across various classes of work fluctuated but showed signs of returning to 2019 levels by 2022, women’s employment shares in paid and unpaid family work continued to rise. This trend suggests a persistent gender imbalance in the labor market, with women disproportionately engaging in lower-quality employment.

QUALITY OF EMPLOYMENT

The quality of employment has deteriorated, as evidenced by the increase in short-term employment and unpaid family work during the pandemic. Although there has been some recovery, these forms of employment remain elevated, particularly among women. This shift towards more precarious forms of work underscores the need for robust social safety nets and policies to support worker income during economic shocks.

WORKER PERSPECTIVES

As the COVID-19 pandemic disrupted lives and economies worldwide, workers in Iloilo City experienced significant changes in their employment situations.

Joney Santos, a sales clerk, shared how her working hours were drastically reduced.

“I used to work eight hours a day, six days a week. During the pandemic, it was reduced to four hours a day,” Santos said.

Fermio Reynes, a construction worker, noted a different experience.

“At first, we were told to stop working entirely. Later, we resumed but with shorter hours. It was tough, but at least we had some work,” he explained.

Lorna Gomez transitioned to remote work and highlighted both the benefits and challenges of her new setup.

“Working from home allowed me to stay employed, but balancing work and home responsibilities was difficult. The internet connection was also an issue,” Gomez said.

Marc Rivera, a gig worker, saw an increase in opportunities during the pandemic.

“The demand for delivery services skyrocketed. I ended up working more hours than before the pandemic,” he stated.

POLICY IMPLICATIONS

The study emphasizes the importance of policy interventions to enhance labor market flexibility and protect worker welfare.

“With limited social safety nets, it is crucial to deliver timely support to workers during negative economic shocks,” the report states.

Policymakers should also focus on wage adjustments and coping mechanisms for households to provide more comprehensive social protection.

While the Philippine labor market shows signs of recovery, ongoing challenges such as lower average working hours and increased precarious employment highlight the need for targeted policy measures to ensure a resilient and inclusive labor market post-pandemic.