April 2021

IZA DP No. 14272: The Effect of a Health and Economic Shock on the Gender, Ethnic and Racial Gap in Labor Market Outcomes: Evidence from COVID-19

updated version forthcoming as ''The Effect of Covid-19 as an Economic Shock on the Gender and Ethnic Gap in Labor Market Outcomes' in: Studies in Microeconomics, 2021

With more than 29 million confirmed cases of Covid-19 in the U.S. and 119 million cases worldwide, the pandemic has affected companies, households and the global economy. We explore the effect of this health and economic shock on labor market outcomes, and the changes in labor market disparities between ethnic groups and genders. The results provide evidence of an adverse effect of Covid-19 on labor market outcomes of all demographic groups, a widening gap between the employment prospects of minorities and whites, but no change in the earnings gaps between racial and ethnic groups. We also do not find a deterioration of the differentials between genders. The findings have implications related to the priorities of policy decision makers when implementing policies to combat race and ethnic, and gender gaps in the labor market.