Economic impacts of Covid-19 on the labor market and human capital

TERRA ECONOMICUS, , Vol. 18 (no. 4),

This paper tackles the economic impacts of COVID-19 pandemic on the labor markets and human capital. Specifically, it looks into the issues the pandemic brought upon the human resources and personnel during coronavirus lockdowns. Our results identify that in spite of all the adverse effects of the pandemic such as the excessive burden on the healthcare system, great economic losses and disruptions on the labor market (such as the loss of human capital and widening gaps in gender inequality) due to the lockdowns in many countries intended to slow down the spread of the infection with the purpose of flattening the curve representing the numbers of the COVID-19 patients, the current situation had many positive economic effects. For instance, we find that the recent pandemic helped to increase the financial inclusion and enabled broader access to financial system. In addition, during the past few months, digitalization and the use of information technology deepened and progressed in both large and small enterprises as well as in the higher education institutions. Moreover, COVID-19 pandemic helped to develop the awareness about the climate change among many people by demonstrating how the decrease in economic activity can have a profound effect on cutting CO2 emissions. Furthermore, we find that COVID-19 pandemic contributed to optimizing work load and cutting unnecessary work in many large and small business companies and public institutions. It is likely that most of them will continue with this optimization and digitalization of work after the pandemic is over. Last but not least, we note the enhanced family life and interpersonal relations that would without any doubt contribute to the quality of human capital and the level of happiness. Our results might be useful for public officials and labor market specialists who would want to grasp the consequences of the COVID-19 pandemic and to find ways how to smoothen its impacts.
Citation: Dvořák, M., Rovný, P., Grebennikova, V., Faminskaya, M. (2020). Economic impacts of Covid-19 on the labor market and human capital. Terra Economicus, 18(4), 78–96. DOI: 10.18522/2073-6606-2020-18-4-78-96
Acknowledgment: The study was funded by the Russian Foundation for Basic Research (RFBR) and the Krasnodar Territory of the Russian Federation, project No. 19-413-230017.

Keywords: labor market; COVID-19; human capital; economic impact; pandemic; personnel security

JEL codes: J20; J24; M45; P36

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