"Government measures to contain the spread of the virus were epidemiologically sensible, yet not gender-neutral."

The unprecedented shutdown of businesses in specific industries along with social distancing guidelines and overall insecurity caused by the COVID-19 pandemic resulted in the temporary halt of major parts of the economy in many countries in 2020, with dire consequences for these economies. Sectors in which physical proximity with customers is often unavoidable were particularly affected. At the same time, many self-employed people work in such industries. For instance, 91 percent of self-employed women and 68 percent of self-employed men in Germany worked in the service sector in 2016 according to the OECD.  

BSE researchers Daniel Graeber and Johannes Seebauer, together with Alexander Kritikos, DIW Berlin, empirically investigate how the economic consequences of the pandemic affected the self-employed. To this end, the authors use the novel SOEP-CoV survey. The SOEP-CoV survey is a random subset of the German Socio-Economic Panel (SOEP), in which respondents were interviewed about their experiences during the second quarter of the pandemic.

The authors find that the self-employed were indeed significantly more likely to suffer financial losses from the pandemic: more than half state that they experienced a decline in income following the pandemic, while this holds true for only about every eight employee. More strikingly, however, they uncover a sizeable gender gap in the likelihood of income losses from self-employment. Self-employed women are about one-third more likely to experience income losses than their male counterparts. Conversely, there appears to be no comparable gender gap among employees. 

Importantly, Graeber, Kritikos and Seebauer present evidence that this gender gap among the self-employed is predominantly driven by the sorting of women into industries that were more severely hit by the COVID-19 pandemic. Examples of these industries are “personal service activities,” “retail trade,” and “human health activities.”  Moreover, businesses of women were also significantly more likely to be directly affected by government-mandated restrictions such as the regulation of opening hours.  This is shown to contribute to the observed gender gap. By contrast, there appear to be no gender differences in the likelihood that businesses experienced supply or demand shortages. That is, neither were self-employed women more likely to be affected by suppliers being unable to deliver materials or parts, nor were they more likely to face a drop in demand for their products and services than self-employed men.

These novel findings help inform policy makers about potential remedies for the gender inequity that resulted as a consequence of the COVID-19 pandemic. They show that, while the government measures to contain the spread of the virus were epidemiologically sensible, they were not gender-neutral and affected self-employed women in particular.

The authors conclude that it is critical that policymakers ensure that the pandemic does not a turn into another obstacle on the way to gender equality.

Daniel Graeber (DIW)
Alexander S. Kritikos(DIW)
Johannes Seebauer(DIW)

References

OECD (2017). Entrepreneurship at a glance. https://www.oecd-ilibrary.org/docserver/entrepreneur_aag-2017-en.pdf?ex… guest&checksum=D90265D7A9E5AB441BB39E57CA65F57A, accessed 2021-13-01.

Original paper: 

Graeber, D., Kritikos, A.S. & Seebauer, J. COVID-19: a crisis of the female self-employed. J Popul Econ 34, 1141–1187 (2021). https://doi.org/10.1007/s00148-021-00849-y