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Moody's - Coronavirus' impact on EU workforce could delay economic recovery in Southern Europe

·10 min read
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Research Announcement:

Moody's - Coronavirus' impact on EU

workforce could delay economic recovery in Southern Europe

London, April 22, 2021 --

» Female labour force participation in several southern European countries has declined during the

pandemic

» Italy, Spain and Portugal are the most exposed to rising unemployment of less-educated and

young workers

The coronavirus pandemic's widespread disruption to European labour markets has been

particularly severe for women, young people and less-educated workers, a trend that could delay the

recovery from the shock in countries such as Italy, Spain and Portugal, Moody's Investors Service

said in a report today.
“For some groups, the COVID-19 employment crisis has been far worse than the global financial

crisis in 2007-08,” said Ruosha Li, a Moody's AVP-Analyst and the report's co-author. “The effect on

younger people, women and less qualified employees has been particularly large. This is in large

part because of the disruption to sectors such as hospitality and tourism that employ a large number

of workers from these demographic groups.”
For the worst-affected countries in Southern Europe, a weaker and more prolonged economic

recovery after the pandemic may imply a long-term loss of output. If not addressed by relevant

education and labour market policies, a protracted recovery may result in a larger share of low

income households less able to accumulate physical and human capital, especially through

educational attainment, which may weaken economy-wide labour productivity over a longer period.
Home-care obligations, on top of challenges in looking for work during a pandemic, are key reasons

for the decline in labour participation rates. Italy, Spain and Cyprus had the largest drops in female

employment and participation rates last year. By contrast, women in Denmark and Sweden are less

likely to leave the workforce because of care responsibilities.
Once governments start to withdraw support schemes, Moody's expects unemployment rates to rise

for both men and women. However, participation rates for women may deteriorate further due to their

relative dominance in sectors affected by a slow recovery, such as hospitality, but also in sectors hit

by longer term trends amplified by the pandemic, such as retail.
Subscribers can access the report at:

http://www.moodys.com/researchdocumentcontentpage.aspx?

docid=PBC_1265091

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global

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This publication does not announce a credit rating action. For any credit ratings referenced in this

publication, please see the ratings tab on the issuer/entity page on

www.moodys.com

for the most

updated credit rating action information and rating history.
Ruosha Li

AVP-Analyst/CSR

Credit Strategy & Standards

Moody's Investors Service Ltd.

JOURNALISTS: 44 20 7772 5456

Client Service: 44 20 7772 5454
Colin Ellis

MD-Credit Strategy

Credit Strategy & Standards

Moody's Investors Service Ltd.

JOURNALISTS: 44 20 7772 5456

Client Service: 44 20 7772 5454
Releasing Office:

Moody's Investors Service Ltd.

One Canada Square

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JOURNALISTS: 44 20 7772 5456

Client Service: 44 20 7772 5454

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