Heterogeneous effects of the Covid-19 crisis on Italian workers’ incomes: the role played by jobs routinization and teleworkability

The Covid-19 pandemic appears to have engendered heterogeneous effects on individuals’ labour market prospects. This paper focuses on two possible sources of a heterogeneous exposition to labour market risks associated with the pandemic outbreak: the routine task content of the job and the teleworkability. To evaluate whether these dimensions played a crucial role in amplifying employment and wage gaps among workers, we focus on the case of Italy, the first EU country hit by the Covid-19 first wave. We use a static microsimulation model based on data from the Statistics on Income and Living Condition survey (IT-SILC) enriched with administrative data and aligned to monthly observed labour market dynamics by industry and regions. We simulate changes in the wage distribution in 2020 and investigate whether income drops risks – before and after income support measures to capture the effect of public redistribution – differed among workers whose jobs are characterised by a different degree of routinization (as proxied by the routine task intensity - RTI index) and teleworkability (as proxied by the TWA index). We find that RTI and TWA are negatively and positively associated with wages, respectively, and they are correlated with higher (respectively lower) risks of a large labour income drop due to the pandemic. However, differences in income drop risks for workers who differ by RTI and TWA largely reduce when income support measures are considered.