1. Introduction

This study builds upon the work of Kakarlapudi and Shagishna (2023), who examined the impact of COVID-19 on unemployment in Kerala. Their research revealed a significant increase in unemployment during the first wave of COVID-19, from April to June 2020, although the rate was lower in Kerala than at the national level. Despite being the first Indian state to report a COVID-19 case, Kerala successfully controlled the virus's spread during the first wave, earning international recognition. However, during the second wave, Kerala experienced the highest unemployment rate, a three-fold increase compared to the national average and other states (Kakarlapudi and Shagishna, 2023). The authors also highlighted that the impact of unemployment and its recovery varied across demographics, with rural and urban areas affected differently and females losing more jobs than males.

In this study, we aim to expand upon their findings by exploring the impact of COVID-19 on employment loss among various socio-economic groups. We will analyse the loss of employment based on demographic characteristics, social categories, the industry of occupation, and the type of employment contracts. The remainder of the paper is organised as follows. Section 2 discusses data and approach. Section 3 presents the trends and patterns of employment loss across different socio-economic axis in the first two waves of COVID-19 in Kerala and its recovery. The last section concludes with a discussion of the findings.

2. Data and approach

The analysis uses nationally representative data from the CPHS, which is collected in waves. Each wave represents a four-month period (e.g., January to April), and sample households are visited three times per year. The CPHS data includes four responses for employment status: 1) Employed, 2) Unemployed: not willing and not looking for work, 3) Unemployed: willing but not looking for work, and 4) Unemployed: willing and looking for work. Category two is considered out of the labor force, while categories three and four are used as unemployment indicators.

To understand the impact of the crisis on employment and the nature of the recovery, the analysis uses data from January 2019 to August 2021, representing eight waves (waves 16 to 23), to estimate employment growth during COVID-19. The reference period is September-December 2019, against which employment trends are analysed to analyse the impact and recovery. The analysis focuses primarily on Kerala, but for comparison purposes, 16 states are grouped into high-income and low-income categories based on their per capita income. States with a per capita income higher than the national average (Andhra Pradesh (AP), Gujarat (GJ), Haryana (HR), Karnataka (KA), Maharashtra (MH), Punjab (PB), Tamil Nadu (TN), and Telangana (TS)) is classified as high-income states, while those with a per capita income lower than the national average (Assam (AS), Bihar (BH), Chhattisgarh (CH), Jharkhand (JH), Madya Pradesh (MP), Odisha (OD), Rajasthan (RJ), Uttar Pradesh (UP), and West Bengal (WB)) are considered low-income states.

3. Socio-economic dimensions of employment loss during COVID-19

In light of the COVID-19 pandemic, the loss of employment and livelihood opportunities has emerged as a major concern among multilateral organizations, policymakers, and academia, prompting a proliferation of studies aimed at quantifying the magnitude of this phenomenon across various dimensions (Abraham et al, 2021; Azim Premji University, 2021; ILO, 2020; 2021, 2022; Kakarlapudi, 2022; Kannan and Khan, 2022; Mohanan and Kar, 2022; OECD, 2020; RBI, 2022, Vyas, 2020; Walter, 2020). The evidence clearly suggests that the pandemic disproportionately impacted women, people working in the informal sector and people belonging to marginalised communities. In response to these challenges, policymakers and organisations have implemented various measures to support individuals and businesses, including wage subsidies, unemployment benefits, and small business loans. However, the long-term impacts of the pandemic on employment and livelihoods are still uncertain and will likely continue to be a major concern for the foreseeable future. This section analyses the trends associated with employment loss in Kerala across diverse socio-economic characteristics.

3.1 Employment impact: A demographic profile

Youth employment has long been a significant challenge in developing countries, and the COVID-19 crisis has only exacerbated this issue. According to the International Labour Organization (ILO), in 2020, the Asia Pacific region witnessed a significant loss of jobs among young people compared to other age groups. Nearly half of the young workforce in the region is employed in the four sectors hardest hit by the pandemic. India is no exception to this trend, as indicated by a study conducted by APU in 2021, which reveals that youth have been severely impacted, with 33% of workers aged between 15-24 years failing to recover employment by December 2020. This study follows the guidelines outlined in the national youth policy document, which defines youth as people aged between 15-29 years, with everyone else classified as non-youth (Table -1).

During the first wave of COVID-19 in Kerala, youth employment declined by 24% from Jan-April 2020, three times more than the national level. However, youth employment recovered in subsequent months, while high-income and low-income states showed declines of around 14% and 20%, respectively, in May-Aug 2020. In the second wave (May-Aug 2021), Kerala's youth employment remained stable, with levels higher than pre-pandemic. Meanwhile, national employment recovery reached 85%, with high-income states recovering 88% and low-income states recovering 82.7%. Low-income states suffered more due to the nature of the labour market (Table 1).

Non-youth employment loss in Kerala was significantly higher (23%) than the national levels of 6% for Jan-April 2020. However, non-youth employment improved after that, with 100% recovery in both low-income and high-income states by Sep-Dec 2020, although Kerala's recovery was lower at 95%. In the second wave (May-Aug 2021), non-youth employment in Kerala declined to 87%, while there was no significant decline at the national level. In contrast to national trends, youth in Kerala lost more employment in the first wave, but non-youth lost more jobs in the second wave. While non-youth showed a 100% recovery, youth employment recovery remains poor (Table 1).

During the first wave of the pandemic, youth in Kerala lost jobs at three times the national average. In the second wave, the youth continued to experience higher levels of job loss than non-youth at the national level, but in Kerala, youth gained employment while non-youth lost jobs.

3.2 Employment impact: A social profile

In India, caste hierarchy often translates into the occupational hierarchy, with low-paying informal sector jobs largely taken up by underprivileged castes. Given that the informal sector has been hit hardest during the COVID-19 crisis (Azim Premji University, 2021; Kannan and Khan, 2022; Mohanan and Kar, 2022), the employment impact will likely differ across different social categories. While vulnerable sections like SC/ST communities have been hit hard across India, Kerala shows a different trend. In Kerala, SC-STs were hit hard in the first wave. In Jan-April 2020, employment index values declined to 98.41% for the general category, 95% for OBCs, and 88% for SC-STs at the national level. Kerala saw a similar trend during this period, but the effect on OBCs (78.4%) and SC-STs (75.5%) was much higher in Kerala than the national and state averages (Table 2). However, the recovery of SC-STs is faster than others in Kerala, while at the national average non-SC-STs recovered faster. In the second wave, the SC-STs in Kerala suffered an employment loss of 14 per cent compared to 6 per cent in the general category and 2 per cent among the OBCs  (Table 2).