School closures and parental labour market responses during COVID-19: Evidence from South Africa

Abstract

This paper investigates the effects of COVID-19 induced school and daycare closures on the labour market outcomes of working-age South Africans (SA). This aggregate, exogenous shock to the labour market had profound implications for the world of work around the globe. We apply the theoretical underpinnings of human capital theory and time allocation models to examine the socio-economic impacts of school closures on parental labour supply. What sets the SA context apart is the high levels of unemployment pre-COVID, which leads to more readily available caregivers both before and during the pandemic. We postulate that this leads to an excess supply of caregivers and a low substitutability between parental and educator time, depending on the age of the child. However, we find persistent negative associations between school closures and hours worked that are not minor in size, with larger effects for parents and those living with pre-school-age children, in both a balanced and unbalanced panel of the SA National Income Dynamics Study-Coronavirus Rapid Mobile Survey (NIDS-CRAM). No impact is found for the probability of being employed, or on broad labour force participation, or income. These effects are attenuated to insignificance in households where a grandparent is present or where grants constitute the main household income source, consistent with the availability of alternative caregivers in larger, multigenerational households. The hours effect is driven almost exclusively by changes in female labour supply. Our results are robust to a number of specifications, placebo checks, and variations in covariates.