The Coronavirus Pandemic: Impact on Unemployment and Labour Force Participation

20 April 2020

Listen to episode 38 of ThoughtSpace (above) featuring Dr Mahesh Vyas and Yamini Aiyar.

As the economy comes to a grinding halt and businesses close for the duration of the lockdown, the big question we look at in this episode is the impact of the lockdown on unemployment, labour force participation, and the overall income levels of both individuals and business. The economy had not yet recovered from the previous shocks of demonetisation and GST; the lockdown has accentuated concerns around labour force participation and income levels, which have dropped staggeringly. As India thinks about post-lockdown strategies, what must the government do to ensure that households across the country have enough to meet basic requirements?

In the sixth episode on the Centre for Policy Research’s series on the coronavirus pandemic, Yamini Aiyar, President & Chief Executive of CPR, speaks with Dr Mahesh Vyas, MD and CEO of Centre for Monitoring the Indian Economy. Dr Vyas sheds light on India’s labour force participation and income levels by sharing findings from CMIE’s regular household surveys and what they have revealed since the lockdown was imposed.

He points out that unemployment rate shot up from 7-8% to 23-24%, labour force participation rate dropped from 43% to 35.5%, and over 45% households report a reduction in income as compared to a year ago. Vyas recommends better communication from local governments to build confidence among workers and direct income transfers to beneficiaries equivalent to at least two months of salary, despite chances of wastage.

This is the sixth in a series of episodes by the Centre for Policy Research on the unfolding coronavirus pandemic in India. You can follow the Centre’s work on Covid-19 on Twitter or visit You can listen to all the episodes in the Coronavirus Conversation series here.

The views shared belong to individual faculty and researchers and do not represent an institutional stance on the issue.