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Instituto Valenciano de Investigaciones Económicas


The weight of the most vulnerable groups to unemployment triggered by COVID-19 is greater in the Valencian Community

The Coronavirus pandemic, along with the measures taken to prevent its spread, have already registered in the first few weeks since the outbreak important consequences in the labor market, as is made evident by the number of ERTEs (temporary layoff regulations) processed, the decrease in social security affiliation rates and the rise in unemployment figures recorded in March. In the Valencian Community, it is reassuring to know that for 96.7% of workers affected by layoff procedures, companies have chosen to temporarily suspend their work relationship rather than terminating their contract. In this regard, this new document analyzes the short-term vulnerability of the labor market as a result of the COVID-19 crisis by close examining certain groups at higher risk of losing their job, as in previous crises.

According to the results, the weight of the most vulnerable groups to short-term job loss, i.e., workers with temporary contracts or indefinite contracts but have been working for a short period of time, self-employed, less qualified and those in small-medium firms and worst-affected sectors, is greater in the Valencian Community than in Spain. In addition, businesses that are experiencing the worst drastic effects and will suffer a longer crisis because of social distancing restrictions add up to 33.1% of total employment in the Valencian Community, while representing an average of 29.4% of total employment in Spain.

Therefore, stronger measures are necessary to deal with the current crisis. Solutions to immediate problems should not ignore the long-term damage to employment, which should be considered when designing public policies, including initiatives that promote the creation of new job opportunities.

27 April 2020