markets were hit hard In the first year of the coronavirus disease (COVID-19) pandemic, Southeast Asia managed to contain the virus relatively well compared with most other regions, but with some heterogeneity across countries. Within our sample of five countries, Indonesia, Malaysia, and the Philippines registered more cases per capita than Thailand and Viet Nam. All countries implemented strict containment measures including lockdowns, workplace closures, and mobility and travel restrictions. While playing a crucial role in mitigating the health impacts, these measures had important repercussions on labor markets. Beyond these domestic issues, the high level of integration of these countries in the global economy meant that international demand fluctuations and supply chain disruptions were also key channels through which the pandemic affected jobs and incomes in the region.

As mobility restrictions and containment measures prevented labor reallocation in the first half of 2020, unemployment rates surged, accompanied by massive labor market exits The way labor markets were affected, and the type of adjustment that took place signified various elements—such as the scale of the COVID-19 shock, policy response and stringent restrictions, and international trade and linkages—at work and interacting with structural factors. Job losses peaked in the second quarter (Q2) of 2020, when containment measures were at their most stringent. As mobility restrictions and workplace closures prevented labor reallocation across sectors—from wage employment to self-employment, or from formal to informal employment—unemployment rates surged in Indonesia, Malaysia, Thailand, and the Philippines, while many other displaced workers exited the labor force. In Viet Nam, where the largest share of job losses in Q2 2020 consisted of agricultural jobs, the vast majority of job losses consisted of transitions out of the labor force.