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The many faces of labor markets’ vulnerability for women in the Global South amid COVID-19

Authors: Erika Martínez Fernández, Lina Tafur Marín, Pablo Cortés, Susana Martinez-Restrepo

COVID-19 may have affected the status of employment [1] and working conditions of women in the Global South. The employment status often grants employment benefits to its holders, such as insurance or pensions; [2] however, when that status is weak, workers usually lack decent work features, such as earning a minimum wage and having job security. To better describe such a situation, the World Bank has introduced the concept of vulnerable employment to refer to workers who are either self-employed as own-account workers or contributing family workers. People holding vulnerable employment are also more prone to have less favorable working conditions as informal work arrangements. [3] This situation means they are least likely to benefit from social protection and safety nets, leaving them more exposed to economic shocks like the one caused by COVID-19 and at the greatest risk of poverty. 

Before COVID-19, women from the Global South were already more likely to have vulnerable employment. Nonetheless, the slowdown of the economy severely affecting economic sectors with the highest feminization rates, [4] and measures adopted by authorities to curb the spread of the virus, are likely to have increased women’s propensity to vulnerable employment. 

This brief explores women’s representation in vulnerable employment before COVID-19 using the 2019 World Bank indicator to understand women’s share as part of the self-employed labor force considered vulnerable. This exercise offers us an approximation to the current employment crisis faced by women. It is noteworthy that the subcategories of self-employed workers have some limitations since not all own-account or unpaid family members are in precarious situations. [5] “The many faces of vulnerability for women in the labor markets of the global south amid COVID-19” is the second brief of the series Gender and COVID by Corewoman and Cepei.  

Beyond the World Bank metric, the analysis also factors in informality rates and its link to vulnerable employment to better understand how these phenomena may affect women’s experiences in the labor markets of the Global South amid COVID-19. For the analysis, we use the 2019 data provided by ILO to look at women’s share in informal employment in specific countries in the Global South that had provided the disaggregated data.

One of the challenges to conducting this analysis is that most Global South countries lack recent data that reveals how COVID-19 has affected women’s representation in vulnerable employment and their participation in the informal labor market. However, considering these caveats, and based on the available data to date, the close interaction between vulnerable employment and informality shows a pattern in which, overall, women face greater vulnerabilities in the labor market, as the following sections of the brief will describe.

WOMEN WERE MORE EXPOSED TO VULNERABLE EMPLOYMENT BEFORE COVID-19 IN THE GLOBAL SOUTH

Before COVID-19, women in the Global South were already more prone to have vulnerable employment (44%) than men (39,4%). [6] The situation is likely to have worsened amid the pandemic. As seen in Figure 1, women in vulnerable employment by 2019 as part of the total share of employment were significantly high in certain Global South regions, specifically in Sub-Saharan Africa (73,5%) and Southern Asia (65,2%). The scenario is more complex when diving into some country profiles. For example, in Mauritania and Liberia, women in vulnerable employment represented 75,6% compared to 41,4% in men. Due to COVID-19, the economic shock triggered by severe lockdowns and curfews aims to be a more complex experience for women. Since female occupations suffered the most and caregiving is a feminine role, many who were employed may have been laid off and become self-employed as family contributing or own-account workers  to find more flexibility, should they not permanently exit the labor force.

Source: Author’s elaboration based on ILO data from The World Bank

In addition, as presented in Figure 2, before COVID-19, women had higher levels of share in vulnerable employment on average. For example, there was a 13 percentage point (pp) difference between men and women in Sub-Saharan Africa and five percentage points (pp) in South-East Asia. In Latin America and the Caribbean, and Central and Western Asia, differences in the share of vulnerable employment are less pronounced but still higher for women. Only in Eastern Asia and the Arab States differences indicate a larger proportion of men with vulnerable employment than women that may be linked to the low participation rates of women at both the educational and occupational levels (See Figure 3). [7] [8]

Source: Author’s elaboration based on ILO data from The World Bank

Within the self-employed, women outnumbered men as part of contributing family workers in every region of the Global South by 2020. This subgroup, also known as unpaid family workers, is associated with informality and poor working conditions since they are usually considered a “reserve” labor force during booms. In other words, for contributing family workers, their income is not constant, nor their employment is permanent. In addition, they usually have low levels of educational attainment and are also more likely to be overworked or exploited when it comes to working hours. [9]

Before COVID-19, Eastern Africa, Asia, and the Pacific were the regions from the Global South with the highest share of women as contributing family workers, with gaps that range between 13 and 20 pp. The smallest gap was observed in the Arab States, where there was only a 1.9 pp difference, although records show that this is the region with the lowest vulnerable employment, as depicted in Figure 2. Only in Sub-Saharan Africa, where vulnerable employment is predominant over formal employment, self-employed men had a higher proportion of contributing family workers than women. 

Vulnerable employment can also be a snapshot of a specific refugee and/or migrant crisis. To generate a livelihood, refugees, especially those without legal documentation while abroad, are more likely to become self-employed or own-account workers that disproportionately concentrate on informal jobs. During COVID-19, workers with formal contracts were less likely to be adversely affected by the pandemic. [10] The opposite occurred with informal workers, who were at high risk of having their daily source of income cut off and had little chance of getting government relief packages provided to those who lost their income due to the pandemic. [11]

In Arab states, Syrian refugees, especially women and younger workers in the informal economy, have been the hardest hit by COVID-19 in Jordan and Lebanon —where they represent 56% and 63% of total refugees—. [12] In Latin America, a similar situation is faced by Venezuelan migrant women. According to the UN Refugee Agency (UNCHR), 4.9 million [13] have fled the country by 2020. Disaggregation of the composition of the population by sex does not suggest significant differences between women (49.7 %) and men (49.5%), but it does in access to employment. Despite having higher levels of education, Venezuelan migrant women in Latin America [14] are mainly found in the informal sector than men. [15] Although available data do not allow to accurately estimate the effects of COVID-19 on women migrant workers in the region, they have likely ended up less protected from job losses during the economic recession caused by the COVID-19 crisis. [16]

THERE IS A CLOSE LINK BETWEEN VULNERABLE EMPLOYMENT AND INFORMALITY FOR WOMEN

People holding vulnerable employment are more prone to have informal work arrangements that impact their working conditions and make them vulnerable to economic shocks such as the one triggered by COVID-19. [17] [18]

Informality is understood as all economic activity uncovered or insufficiently covered by formal arrangements regulated by the law. [19] Therefore, informal workers are workers who lack labor protections and social benefits through employment benefits. Before COVID-19, women outnumbered men in informality representing 70% of all employment in emerging and developing countries (compared to 18% of informality in developed countries). [20] Meanwhile, for low-income countries, the share of women in informality was 92% compared to 87% of men. [21]

In many developing countries, women are prone to informality because flexibility, which is highly valued especially by mothers, is only available through the informal sector. Lack of work flexibility can disincentivize women’s formalization. Instead, it can push them to concentrate on those jobs that facilitate balancing income-generation and domestic responsibilities. [22] During COVID-19, the double burden of paid work and unpaid care work in the household due to mobility restrictions could have led to increased informality among women who needed flexibility arrangements that the formal sector hardly provided them. [23]

The following analysis on informality as a share of total employment focuses on the countries where women have been hit the hardest. Eligibility of countries based on 1) their location (Global South), 2) the female-informality rate observed by 2019, and 3) the gender gap observed in informality rates by 2019.

For the countries of the Global South used in the analysis of this brief, the average informality rate was 66,6% for women and 63,3% for men, which represented a gap of 3,2 pp (non-statistically significant). However, when looking at specific countries, the gap can reach 14,5 pp against women, as in El Salvador (71,4% for women, compared to 56,4% for men); or 25.7 pp against men as it was the case of Jordan where women barely participate in the labor market. Moreover, as Figure 3 shows, in most countries, except some Arab states, [24] female’s share in informal employment is higher. Such levels mean that women could be more exposed to job insecurity. and lack the institutional protection or assistance they require to alleviate poverty when facing an economic crisis.

Source: Author’s elaboration based on ILOSTAT

Informal businesses deemed non-essential by Global South authorities, especially beauty parlors, restaurants, care activities, and tourism, were severely affected by the measures to stop the spread of COVID-19. It is estimated that such interventions may have contributed to a potential increase in poverty rates, as informal workers in those sectors may have lost their income, and informal businesses’ closure could be permanent in many cases. [25] In this context of informality, women have been particularly affected by the COVID-19 economic crisis.  

CONSIDERATIONS FOR POLICY ACTION

The impacts of crises are never gender-neutral, and COVID-19 is not the exception [26]

Most recent economic shocks in the Global South, such as the Asian financial crisis of the late ’90s or the Ebola crisis in West Africa, have never put women’s needs on the agendas of economic recovery. Few countries in the Global South are doing so during COVID-19, but there is still a long way ahead from policy to action towards a gender-inclusive recovery.


Promote tax incentives for women’s formalization

It is critical to implement fiscal stimulus packages designed to protect women’s incomes, prioritize labor-intensive female sectors into the recovery process, and promote affirmative actions to encourage women to participate more in driving sectors of the economy. [27] For example, tax incentives can foster new opportunities for women to access traditionally male-dominated industries and bring back women who have exited the workforce. [28] Moreover, creating quotas in public procurement could enable job creation for women in historically male-dominated economic sectors by adopting incentives to hire more women within approved projects on a point-based system. However, although tax incentives and quotas could leverage women’s access to formal employment, policies as a whole   need a gender-sensitive approach that considers females’ barriers to formalization and acknowledges informal women’s organizations challenges into the process.

Women-led grassroots organizations: an untapped key for a better recovery 

During COVID-19, women-led grassroots organizations from the Global South have spearheaded initiatives allowing their affiliates to keep their jobs and financially afloat during the pandemic. For example, the Self Employed Women Association (SEWA) in India, an organization of nearly two million women informal street workers, partnered with the city of Ahmedabad to deliver their products —fresh vegetables and fruits— using electric rickshaws. [29] In doing so, they have been able to innovate their businesses and maintain their source of income while cushioning the effects of prolonged quarantines and strict curfews. [30] In a similar direction, women organizations in armed conflict-affected territories in Colombia have promoted income generation activities and credit acquisition through community women’s circles lending to rural women during COVID-19. [31]

Women-led grassroots organizations should be strengthened and play a leading role in the economic recovery. This can be achieved by articulating them with institutions at all levels of government and international cooperation agencies to work collaboratively in designing and implementing strategies aiming to support women’s engagement in the labor markets, bettering their working conditions, or strengthening their productive projects.


[1] The indicator of status in employment distinguishes between two categories of the total employed. These are: (a) wage and salaried workers (also known as employees); and (b) self-employed workers. 
[2] Hours of work limit, public holidays, job protection for maternity or parental leave, among others. 
[3] Paid employment vs vulnerable employment. ILOSTAT, June 2018.
[4] Such as hospitality and services, and an increase in time spent caretaking, at the expense of paid work, due to the closure of schools.
[5] Paid employment vs vulnerable employment. ILOSTAT, June 2018.
[6] Excluding Arab States due to the restrictions on female labor participation.
[7] OECD. Women’s Economic Empowerment in selected Middle East and North Africa. OECD, 2017.
[8] The average share of own-account female workers for each region is 3,6% in Arab States; 6,3% in Global North, 15,9% in Central and Western Asia; 26,1% in Eastern Asia; 26,2% in Latin America and the Caribbean; 31,7% in South-Eastern Asia and the Pacific; 41,1% in Southern Asia; and 55,4% in the Sub-Saharan Africa.

[9]  Shahnaz, Lubna, Umer Khalid, and Sajjad Akhtar. Unpaid Family Workers: Unravelling the Mystery of Falling Unemployment, 2008, 2008. [on line] available at https://doi.org/10.13140/RG.2.2.35950.51521 
[10] Vasquez, Ana. “COVID-19: The Increasing Gender Gap of Venezuela’s Migrant Population.” Latin American Policy Review, March 15, 2021. https://latinamericanpolicyreview.com/2021/03/15/covid-19-the-increasing-gender-gap-of-venezuelas-migrant-population/#_ftn3
[11]  UNCHR. VENEZUELAN MIGRANTS UNDER COVID-19. UNCHR, 2020. 
[12]  UNHRC. “Refugee Data Finder,” 2020. https://www.unhcr.org/refugee-statistics/download/?url=wOHb80.
[13]  International Labour Organization. Venezuelan Refugees and Migrants in Latin America and the Caribbean. International Labour Organization, July 2021. 
[14]  The main destinations are Colombia (1.8 million), Peru, (860,000), Chile (455,000) and Ecuador (363,000) (R4V, 2020).
[15]  Vásquez, Ana Camila, Marta Castro, and David Licheri. COVID-19 y El Aumento de la Brecha de Género en la Población Migrante Venezolana. Equilibrium CenDE, April 14, 2021. https://equilibriumcende.com/covid-19-brecha-genero/ 
[16] UN Women. Gender-Responsive Prevention and Management of the COVID-19 Pandemic: From Emergency Response to Recovery & Resilience. UN Women, March 27,2020.www.unwomen.org/-/media/headquarters/attachments/sections/news%20and%20events/in%20focus/covid-19/gender-responsive-prevention-management-covid19.pdf?la=en&vs=1519. 
[17]  OECD/ILO. Tackling Vulnerability in the Informal Economy. Development Centre Studies, OECD, 2019.
[18]  “Country Classification”. World Economic Situation and Prospects, 2014.  [online] availableathttps://www.un.org/en/development/desa/policy/wesp/wesp_current/2014wesp_country_classification.pdf
[19] Ibid
[20] Ibid
[21]  Moussié, Rachel, and Silke Staab. “Three Ways to Contain COVID-19’s Impact on Informal Women Workers.” UN Women Data Hub. UN Women, May 18, 2020. [online] available at https://data.unwomen.org/features/three-ways-contain-covid-19s-impact-informal-women-workers.
[22] Wodon, Quentin, and Benedicte De La Briere. Unrealized Potential: The High Cost of Gender Inequality in Earnings. Washington DC: World Bank Group, 2018.
[23]  United Nations Development Program. Trapped: High Inequality and Low Growth in Latin America and the Caribbean. Regional Human Development Report 2021. New York: UNDP, 2021.
[24]  Women are less exposed to informality in Arab States because women’s employment-to-population ratios are much lower than men’s (OECD/ILO, 2019). 
[25]  Naido, Karmen. “The Labour Market Challenges of COVID-19 in Sub-Saharan Africa.” Africa Portal, June 10, 2020. [Online] available at https://www.africaportal.org/features/labour-market-challenges-covid-19-pandemic-sub-saharan-africa/.
[26] Mary Robinson, Former President of Ireland. [Online] available http://www.ipsnews.net/2020/09/impact-covid-19-women-children/
[27]  “Can Latin America Create Better Job Options for Women?” The Dialogue, April 9, 2021. [online] avaialable ar https://www.thedialogue.org/analysis/can-latin-america-create-better-job-options-for-women/ 
[28]  Ibid. 
[29]  Chen, Martha. “COVID-19, Cities and Urban Informal Workers: India in Comparative Perspective.” The Indian Journal of Labour Economics 63, no. S1 (2020): 41–46. [online] available at https://doi.org/10.1007/s41027-020-00254-1 
[30]  Ibid. 
[31]  Martínez-Restrepo, Susana, Juliana Ramírez, Angélica Castillo, Laura Castrillón, Isabel Calero, Juliana Mejía, and Lina Tafur. Rep. El Continuum de Violencias Basadas en Género en el Contexto del Conflicto Armado Colombiano y su Relación con el Empoderamiento Económico de las Sobrevivientes. Bogotá: CoreWoman, 2021.