Understanding workforce vulnerability: the COVID-19 impact on China’s hospitality and tourism labor market—evaluated by using a difference-in-difference approach

This study examines the impact of the COVID-19 pandemic on the labor size and structure within China’s hospitality and tourism industry using a difference-in-difference (DID) approach. Analyzing data from Chinese A-share non-financial listed companies from 2009 to 2022, it identifies a significant decline in labor size in the hospitality and tourism sector compared to other industries. The research highlights the moderating effects of digitalization, stock price crash risk, internal control, and environmental social governance (ESG) on labor dynamics during the pandemic. Notably, higher digitalization and lower stock crash risk attenuate labor size reductions, while higher internal control levels correlate with greater workforce reductions. Additionally, the analysis reveals disparities based on ownership structure, city scales and geolocation features, indicating that non-state-owned enterprises (non-SOEs) were more adversely affected than state-owned enterprises (SOEs). The results highlight the importance of enhancing digital capabilities and financial transparency for resilience against future disruptions, while also suggesting a reevaluation of internal controls and ESG strategies to improve adaptability during crises. Robustness checks, including the parallel trend test, lagged control variables, alternative time periods and comparisons with the technological sector, confirm the robustness of the findings.