Your browser does not support the PubReader view.
Go to this page to see a list of supporting browsers.
Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 34, No. 1, pp.43-80
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2021
Received 30 Dec 2020 Accepted 26 Jan 2021
DOI: https://doi.org/10.22904/sje.2021.34.1.004

COVID-19 and Employment in South Korea: Trends and Comparison with the 2008 Financial Crisis

Minhyuk Nam ; Soohyung Lee
Minhyuk Nam, BA Candidate, Department of Economics, Sogang University, 35 Baekbeom-ro, Mapo-gu, Seoul 04107, Korea, Tel: +82-2-705-8179 mhnam@sogang.ac.kr
Soohyung Lee, Corresponding author, Associate Professor, Graduate School of International Studies, Seoul National University, Global Labor Organization, and IZA, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea, Tel: +82-2-880-4048 soohlee@snu.ac.kr

JEL Classification: E32, J21, J60

Abstract

We examine the impact of COVID-19 on employment in South Korea as of June 2020. To estimate the causal effect, we use two complementary methods. First, using individual-level data without residence information, we estimate the effects by controlling for detailed characteristics of individuals. Second, using aggregate data without individual characteristics, we exploit the regional variation in the intensity of COVID-19 to measure the effects. We find that the COVID-19 pandemic decreased the employment rate by 0.82%p and increased the unemployment rate by 0.29%p. These estimated effects are 90%–140% larger than those of the 2008 Financial Crisis.

Keywords:

COVID-19, Financial Crisis, Unemployment, Employment

Acknowledgments

We thank Dr. Woo-Hyun Jang and the participants of the “Covid-19 and the Korean Economy” conference for their detailed comments. All errors are our own.

References

  • Balde, Racky, Mohamed Boly, and Elvis K. Avenyo. Labor Market Effects of COVID-19 in Sub-Saharan Africa: An Informality Lens from Burkina Faso, Mali, and Senegal. United Nations University-Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT), 2020.
  • Bank of Korea. The Overview of COVID-19 policy Responses (as of September 24, 2020). (https://www.bok.or.kr/portal/main/contents.do?menuNo=201061, )
  • Bartik, Alexander W., et al. Measuring the Labor Market at the Onset of the COVID-19 Crisis. National Bureau of Economic Research Working Paper (No. w27613), 2020. [https://doi.org/10.3386/w27613]
  • Beland, Louis-Philippe, Abel Brodeur, and Taylor Wright. COVID-19, Stay-at-Home Orders, and Employment: Evidence from CPS Data. 2020.
  • Betcherman, Gordon, et al. Reacting Quickly and Protecting Jobs: The Short-Term Impacts of the COVID-19 lockdown on the Greek Labor Market. 2020. [https://doi.org/10.1596/1813-9450-9356]
  • Boskin, Michael J. How Does the COVID Recession Compare? World Economic Forum (August 28), 2020. (https://www.weforum.org/agenda/2020/08/how-does-the-COVID-recession-compare/, )
  • Coibion, Olivier, Yuriy Gorodnichenko, and Michael Weber. Labor Markets during the COVID-19 Crisis: A Preliminary View. National Bureau of Economic Research Working Paper (No. w27017), 2020. [https://doi.org/10.3386/w27017]
  • Crowley, Frank, Justin Doran, and Geraldine Ryan. The Impact of COVID-19 Restrictions on Workers: Who is Most Exposed? SRERC Working Paper Series (No. SRERCWP 2020-3), 2020.
  • Fairlie, Robert W., Kenneth Couch, and Huanan Xu. The Impacts of COVID-19 on Minority Unemployment: First Evidence from April 2020 CPS Microdata. National Bureau of Economic Research Working Paper (No. w27246), 2020. [https://doi.org/10.3386/w27246]
  • Forsythe, Eliza, et al. “Labor Demand in the Time of COVID-19: Evidence from Vacancy Postings and UI Claims.” Journal of Public Economics 189 (2020): 104238. [https://doi.org/10.1016/j.jpubeco.2020.104238]
  • Government of the Republic of Korea. COVID-19 Economic Policy Measures (as of September 25, 2020). (http://www.korea.kr/special/policyCurationView.do?newsId=148872965#L2-5, )
  • Gupta, S., Montenovo, et al. Effects of Social Distancing Policy on Labor Market Outcomes. National Bureau of Economic Research Working Paper (No. w27280), 2020. [https://doi.org/10.3386/w27280]
  • Heo, C-G., S-K. Ahn, and C-B. Kim. Waves of the Global Financial Crisis and countermeasures. Policy Research 2009-02, Korea Economic Research Institute, 2009.
  • Jain, Ronak, et al. The Labor Market and Poverty Impacts of COVID-19 in South Africa. 2020.
  • Juranek, Steffen, et al. Labor Market Effects of COVID-19 in Sweden and its Neighbors: Evidence from Novel Administrative Data. NHH Dept. of Business and Management Science Discussion Paper (2020/8), 2020. [https://doi.org/10.2139/ssrn.3660832]
  • Kong, Edward, and Daniel Prinz. The Impact of Non-pharmaceutical Interventions on Unemployment during a pandemic. 2020. [https://doi.org/10.2139/ssrn.3581254]
  • Kurmann, André, Etienne Lalé, and Lien Ta. The impact of COVID-19 on US Employment and Hours: Real-time Estimates with Homebase Data. 2020. (http://www.andrekurmann.com/hb_COVID, )
  • Lee, J. and J. Kim. Current Status and Implications of Domestic and International Economic Stimulus Measures related to COVID-19. Issues and Points (No. 1697). National Assembly Legislative Research Office, 2020.
  • Ministry of Health and Welfare, the Republic of Korea. Coronavirus Infect ious Disease-19 Central Disaster and Safety Countermeasure Headquarters Regular Briefing. Press reference (May 3). 2020a.
  • Ministry of Health and Welfare, the Republic of Korea. Coronavirus Infectious Disease-19 Central Disaster and Safety Countermeasure Headquarters Regular Briefing. Press reference (August 22). 2020b.
  • Ministry of Strategy and Finance, the Republic of Korea. Comprehensive Measures to Overcome Economic Challenges. Press release (November 3). 2008.
  • Ministry of Economy and Finance, the Republic of Korea. The 1st Supplementary Budget in 2020. Press release (March 17). 2020a.
  • Ministry of Economy and Finance, the Republic of Korea. The 2nd Supplementary Budget in 2020. Press Release (April 30). 2020b.
  • Ministry of Economy and Finance, the Republic of Korea. The 3rd Supplementary Budget in 2020. Press release (July 3). 2020c.
  • National Assembly Budget Office, the Republic of Korea. Analysis of the Revised Budget for 2009. 2008.
  • National Assembly Budget Office, the Republic of Korea. Impact of the Global Financial Crisis and Policy Responses. 2009.
  • OECD. OECD Economic Outlook, Interim Report September 2020. Paris: OECD Publishing, 2020.
  • Shin, D. Impact of the Global Financial Crisis and Policy Responses. National Assembly Economic Crisis Response Team Publication Series (No. 2). National Assembly of the Republic of Korea, 2008.