Pandemic and employment: Evidence from COVID-19 in South Korea

Using two complementary approaches, this study examines the deterioration of the Korean labor market during the first 10 months of the global COVID-19 pandemic. Applying the synthetic control method, we first find that the COVID-19 outbreak has eliminated 1.1 million jobs (4.2% of nonfarm employment) nationwide in April 2020. However, a difference-in-differences approach shows that local variation in COVID-19 intensity, which captures the “regional” effect of the pandemic, explains only 9% of the national shock. The portion of the regional effect remains low until December. This is mainly because the nationwide fear and policies such as social distancing measures also have a “common” effect on local economies. Our findings suggest that the COVID-19 shock may last long in the labor market due to this common effect unless the risk of infection is completely eliminated.     

COVID-19 and the intentions to migrate from developing countries: Evidence from online search activities in Southeast Asia

COVID-19 has had an enormous effect on labor markets globally. Economic restrictions, notably strict border controls and lockdowns, have led many workers to lose their jobs and forced many migrants to return to their homes or change their migration plans. While adverse effects on labor mobility are expected, variations in the prevalence of COVID-19 and governmental responses to the pandemic across countries are likely to influence workers’ intentions to migrate in different ways. To understand the effects of pandemics on the international labor supply, we explore the impact of COVID-19 and the various economic restriction policies on job search behavior by considering cases from Southeast Asian countries using the difference-in-differences (DID) approach with data from Google Trends Index (GTI). We find that the search volume of queries related to the labor market dramatically increased over time following the outbreak of COVID-19. However, we do not observe any positive impact on the search volume related to emigration, regardless of the infection control measures in the host countries. Our results imply that the job insecurity increases after the imposition of lockdown in the respective countries. On the other hand, the expectation to migrate outside of the country, which requires preparation time and incurs high costs, does not seem to have increased in developing countries.     

Lights out? COVID-19 containment policies and economic activity

This paper estimates how strongly COVID-19 containment policies have impacted aggregate economic activity. We use a difference-in-differences methodology to estimate how containment zones of different severity across India impacted district-level nighttime light intensity, as well as household income and consumption. From May to July 2020, nighttime light intensity was 9.1 % lower in districts with the most severe restrictions compared with districts with the least severe restrictions, which could imply between 5.8 % and 6.6 % lower GDP. Nighttime light intensity was only 1.6 % lower in districts with intermediate restrictions. The differences were largest in May during the graded lockdown, and tapered in June and July. Lower house-hold income and consumption corresponding to zone-wise restrictions corroborate these results. Stricter containment measures had larger impacts in districts with greater population density, older residents, and more services employment. The large magnitudes of the findings suggest that governments should carefully consider the economic costs of country-wide pandemic containment policies while weighing the trade-offs against public health benefits. Keywords: Containment policies, COVID-19, Nighttime lights, India     

COVID-19 and the employment gender gap in Japan

This paper examines how the COVID-19 pandemic affected female employment in Japan. Our estimates indicate that the employment rate of married women with children decreased by 3.5 percentage points, while that of those without children decreased by only 0.3 percentage points, implying that increased childcare responsibilities caused a sharp decline in mothers’ employment. Further, mothers who left or lost their jobs appear to have dropped out of the labor force even several months after school reopening. In contrast to women, the employment rate of married men with children was not affected, which hindered progress in narrowing the employment gender gap.     

The impact of the COVID-19 pandemic on global GDP growth

This paper describes one of the first attempts to gauge the effect of the COVID-19 pandemic on the global trajectory of real GDP over the course of 2020 and 2021. It is also among the first efforts to distinguish between the role of domestic variables and global trade in transmitting the economic effects of COVID-19. We estimate panel data regressions of the quarterly growth in real GDP on pandemic variables for 90 countries over the period 2020 Q1 through 2021 Q4. We find that readings on the number of COVID-19 deaths had a very small effect in our aggregate sample. On the other hand, changes in the stringency of the lockdown measures taken by governments to restrict the spread of the virus were an important influence on GDP. The economic effects of the pandemic differed between rich and poor countries: COVID-19 deaths exerted a somewhat greater drag on GDP in advanced economies, although this difference was not statistically significant, whereas lockdown restrictions were more injurious to economic activity in emerging and developing economies. In addition to these domestic pandemic effects, global trade represented a significant channel through which the economic effects of the pandemic spilled across national borders. This finding underscores how globalization makes each country vulnerable not only to medical contagion from the COVID-19 pandemic, but to economic contagion as well.     

Who suffers from the COVID-19 shocks? Labor market heterogeneity and welfare consequences in Japan

Effects of the COVID-19 shocks in the Japanese labor market vary across workers of different age groups, genders, employment types, education levels, occupations, and industries. We document heterogeneous changes in employment and earnings in response to the COVID-19 shocks, observed in various data sources during the initial months after the onset of the pandemic in Japan. We then feed these shocks into a life-cycle model of heterogeneous agents to quantify welfare consequences of the COVID-19 shocks. In each dimension of the heterogeneity, the shocks are amplified for those who earned less prior to the crisis. Contingent workers are hit harder than regular workers, younger workers than older workers, females than males, and workers engaged in social and non-flexible jobs than those in ordinary and flexible jobs. The most severely hurt by the COVID-19 shocks has been a group of female, contingent, low-skilled workers, engaged in social and non-flexible jobs and without a spouse of a different group.     

Tax enforcement and corporate employment: Evidence from a quasi-natural experiment in China

This study investigates how tax enforcement affects corporate employment in China. We utilize the merger of the State Tax Bureau and Local Tax Bureaus as a quasi-natural experiment and adopt a difference-in-differences framework to identify causality. The results show that tougher tax enforcement has a significant and negative effect on corporate employment and that this effect is more pronounced for firms with higher labor intensity, greater financial constraints, more severe labor market frictions, a lower initial tax rate, lower tax transfer ability, and greater credit market imperfections. Further, the mechanism tests demonstrate that tougher tax enforcement leads to increases in the effective income tax rate, cash holdings, and the cash flow sensitivity of real investment but decreases in accounts receivable and dividend payments. These results are consistent with the liquidity constraints channel. In addition, we exclude several alternative explanations and conduct a series of robustness checks. Overall, our findings indicate that corporate tax enforcement has large effects on the local labor demand, which provides some useful insights for local governments to stabilize employment during the COVID-19 pandemic.     

COVID-19-associated income loss and job loss: Evidence from Indonesia

COVID-19 pandemic has substantially altered socioeconomic conditions around the world. While numerous existing studies analyze the impact of the COVID-19 pandemic among developed states, little is known about its effects on people’s lives and social discrepancies in emerging economies. To this end, we empirically analyze the 2020 Indonesian Labor Force Survey data, hypothesizing that COVID-19 has given idiosyncratic risks and impacts on people by gender, age, education, occupation and regions. We find that income loss and job loss are prominent among males, younger and less educated people as well as among self-employed and part-time non-agricultural workers. These tendencies are not pronounced for people enjoying high income and mobility, but tend to be evident for urban residents and those having dependents. Notably, self-employed people have the highest risk of losing income, while part-time urban workers face the highest probability of losing their jobs. The propensity score matching method also demonstrates that these losses are most evident for the regions susceptible to COVID-19. Overall, we suggest that socioeconomically disadvantaged groups require additional support to strengthen their resilience in the face of exogenous shocks, such as the one caused by the global coronavirus pandemic.     

Changes in women’s empowerment in the household,women’s diet diversity,and their relationship against the background of COVID-19 in southern Bangladesh

The COVID-19 pandemic in Bangladesh, associated public health measures, and people’s reactions were projected to have caused job losses among women, a decline in women’s empowerment and reduced women’s diet diversity. Using a November 2020 telephone survey to re-interview adult female respondents of a November 2019 in-person survey, contrary to expectations we find that more women found than lost jobs, and women’s diet diversity increased over the year partly marked by the COVID-19 pandemic. We did not find evidence of a decline in women’s involvement in food purchase decisions, nor women’s autonomy over use of household income. The change in women’s outside employment is neither statistically related to changes in women’s involvement in food purchase decisions, changes women’s autonomy over use of household income, nor changes in women’s diet diversity. Change in women’s involvement in food purchase decisions is positively related with change in women’s diet diversity and change in women’s autonomy over income use is negatively related with change in women’s diet diversity.     

The impact of COVID-19 on international trade: Evidence from the first shock

This study investigates how the effects of COVID-19 on international trade changed over time. To do that, we explore monthly data on worldwide trade from January to August in 2019 and 2020. Specifically, our study data include the exports of 34 countries to 173 countries. We estimated the gravity equation by employing various variables as a proxy for the COVID-19 damage. Our findings can be summarized as follows: First, regardless of our measures to quantify the COVID-19 pandemic, we found significantly negative effects of COVID-19 on the international trade of both exporting and importing countries. Second, those effects, especially the effects of COVID-19 in importing countries, tended to become insignificant since July 2020. This result implies that the harmful impacts of COVID-19 on international trade were accommodated after the first wave of the pandemic to some extent. Third, we found heterogeneous effects across industries. The negative effects on non-essential, durable products persist for a long time, whereas positive effects in industries providing medical products were observed.     

Sleeplessness in COVID-19 pandemic: Lockdown and anxiety

This paper investigates the sleeplessness in Chinese cities during the coronavirus disease 2019 (COVID-19) pandemic. We provide first evidence of a link from daily COVID-19 cases resulting in sleep loss in a panel of Chinese cities. We use Wuhan, which was the first city to be completely locked down, as basis to present the result that sleeplessness has become a considerably serious issue owing to the COVID-19 pandemic. In using the intervention policy of various cities as exogenous shocks, we find that lockdown policies significantly increase the sleeplessness level of Chinese cities. In addition, the severity of COVID-19 pandemic significantly exacerbates the negative effect of lockdown policies on sleep quality in the city. Overall, this study indicates that policy makers should pay more attention to public mental health when citizens recover from COIVD-19 by investigating the unintended consequences of COVID-19 on sleeplessness level of cities.     

Out of the shadows: Impact of SARS experience on Chinese netizens' willingness to donate for COVID-19 pandemic prevention and control

While charitable donations help to raise funds and contribute to pandemic prevention and control, there are many unanswered questions about how people make such donation decisions, especially in countries like China where charitable donations have played an increasing role in recent years. This study contributes to the literature by assessing the potential impacts of Chinese netizens' experience with the 2002 severe acute respiratory syndrome (SARS) epidemic on their willingness to donate for COVID-19 pandemic prevention and control. Specifically, this study applies a difference-in-differences (DID) model to a dataset collected from a nationwide survey to examine how individuals' exposure to the SARS epidemic affects their willingness to donate to alleviate the COVID-19 pandemic. The results suggest that individuals' SARS epidemic experiences in their early lives, especially during the “childhood-adolescence” period, had a lasting and far-reaching impact on their willingness to donate toward COVID-19 pandemic prevention and control. Also, the impacts were likely heterogeneous by such sociodemographic factors as educational background, health status, and income level. The empirical findings highlight the importance of considering early-life experiences in developing and implementing epidemic prevention and control policies. While the SARS experience likely affected Chinese netizens' willingness to donate toward COVID-19 pandemic prevention and control, lessons learned from both the SARS epidemic and COVID-19 pandemic could be used to develop more effective public health education and prevention programs as well as to increase public donations for future pandemic prevention and control.     

“The better you feel,the harder you fall”: Health perception biases and mental health among Chinese adults during the COVID-19 pandemic

The health risks of the current COVID-19 pandemic, together with the drastic mitigation measures taken in many affected nations, pose an obvious threat to public mental health. To assess predictors of poor mental health in the context of the COVID-19 pandemic, this study first implements survey-based measures of health perception biases among Chinese adults during the pandemic. Then, it analyzes their relation to three mental health outcomes: life satisfaction, happiness, and depression (as measured by the CES−D). We show that the health overconfidence displayed by approximately 30% of the survey respondents is a clear risk factor for mental health problems; it is a statistically significant predictor of depression and low levels of happiness and life satisfaction. We also document that these effects are stronger in regions that experienced higher numbers of confirmed COVID-19 cases and deaths. Our results offer clear guidelines for the implementation of effective interventions to temper health overconfidence, particularly in uncontrollable situations like the COVID-19 pandemic.     

Putting trained labour power to work: the dilemma of education and employment

Demographic factors and educational changes are producing, in many less developed countries, a "pushdown effect" in which recent graduates are forced to take jobs that would earlier have been filled by those with less education. In Indonesia, for example, 1990 senior high school graduates will have to take jobs that were filled by junior high school graduates in 1980 as a result of increases in the supply of educated manpower. While the increase in employment positions in Indonesia is under 5%/year, the number of graduates from junior high school, senior high school, and universities is exceeding this increase. Each year, there is an excess of 2.60 junior high school graduates and 3.83 senior high school graduates/1000 labor force in terms of availability of the types of jobs filled by people with these educational qualifications in 1980. The pushdown effect has further resulted in a fall in the educational differential of income. Between 1976-86, earnings for employees with less than a primary school education quintupled while those for employees with college degrees did not even triple. The presence of large numbers of disillusioned, overqualified workers in the labor force is a potential source of social unrest and there is a need for serious attention to the changing relationship of job and educational status. Possible solutions to this discrepancy include: expansion of the economy; restructuring of economic workers; reorientation of the educational system to enhance the productivity of graduates; raising the status of employment in agriculture and rural small industry; and acceptance by the labor force that the pushdown effect is an inevitable stage of the development process.     

Economic and Distributional Impact of COVID-19: Evidence from Macro-Micro Modelling of the South African Economy

A computable general equilibrium model linked to a microsimulation model is applied to assess the potential short-term effects on the South African economy of the ongoing COVID-19 pandemic. With a particular focus on distributional outcomes, two simulations are run, a mild and a severe scenario. The findings show significant evidence of decline in economic growth and employment, with the decline harsher for the severe scenario. The microeconomic results show that the pandemic moves the income distribution curve such that more households fall under the poverty line while at the same time, inequality declines. The latter result is driven by the disproportionate decline in incomes of richer households while the poorest of the poor are cushioned by government social grants that are kept intact during the pandemic. The COVID-19 pandemic is still unfolding and its economic modelling as well as the data used to operationalise the model will need to be updated and improved upon as more information about the disease and the economy becomes available.     

Social Assistance Amidst the COVID-19 Epidemic in South Africa: A Policy Assessment

In an attempt to minimise the negative economic impacts of COVID-19 on vulnerable households the South African government allocated R50 billion in additional social assistance spending. The cash transfer package included a temporary increase in existing grants and introduced a new “Covid grant.” We assess the chosen package and compare it with an initial proposal to increase the Child Support Grant (CSG). Coverage, cost and welfare effects are calculated to measure the relative impacts in each case. We find that while a significant increase in the CSG delivers resources most progressively, the addition of the COVID-19 grant may potentially reach a much larger group of otherwise uncovered, vulnerable individuals. Critically, this extended coverage comes at a cost to the poorest households, via additional transfers to the upper income deciles. However, we identify several categories of vulnerable household groups which suggests that the workers most negatively affected by the pandemic are not necessarily those in the poorest households. The paper emphasises that social assistance to mitigate the consequences of COVID-19 should not be viewed necessarily as a standard poverty reduction exercise, but rather as an attempt to mitigate COVID-19-related income shocks for the vulnerable who were most negatively affected by the pandemic.     

The spatiotemporal evolution of COVID-19 in China and its impact on urban economic resilience

The spread of the novel coronavirus (COVID-19) has had a major political, economic, social, and cultural impact on various countries worldwide. Based on economic operation, public opinion, public health, government policies and population inflow in the affected areas, this study measures daily economic resilience during the COVID-19 outbreak in 286 prefecture-level cities in China (from 1^st January to 8^th February, 2020). Specifically, this study further investigates the economic resilience and the number of COVID-19 cases by analysing the evolutionary trend of their spatial distribution pattern using the standard deviation ellipse (SDE). The impact of COVID-19 on economic resilience is examined using a panel vector autoregressive model. The following are the findings. (1) The economic resilience value decreased throughout the study period, but the cities with high economic resilience showed a trend of spatial diffusion in the late study period. Wuhan’s lockdown strategy was benefit to control the spread of COVID-19, and promptly stopped the decline of China's economic resilience. (2) Economic resilience and the number of COVID-19 cases influenced their future trends positively, but this effect gradually decreased over time. During the COVID-19, although the number of confirmed cases significantly influenced China's economic resilience, and the disease's spread was evident, China maintained a high level of economic development resilience. (3) The rise in economic resilience during the pandemic's early stages promoted the number of confirmed cases, but the strength of this relationship gradually declined as the pandemic progressed. Returning to work and other activities may increase the risk of infection. Numerous policies implemented at the outbreak’ inception aided in laying the groundwork for economic resilience. Although the outbreak had a detrimental effect on economic resilience in the later stages of the pandemic, a convergent trend was observed at the end of the research period. (4) Using variance decomposition, we discovered that future economic resilience was significantly influenced by itself and by relatively few changes. However, the impact of confirmed cases on economic resilience becomes apparent after the fourth period. This indicates that the number of confirmed cases must be limited during the initial stages. The early support of various sectors in China facilitated the spatial expansion of economically resilient cities. The pandemic has a non-negligible negative impact on economic resilience, but this has been mitigated by Wuhan's timely closure.     

Effect of COVID-19 lockdowns on city-center and suburban housing markets: Evidence from Hangzhou,China

In 2020, governments worldwide enforced lockdowns to contain the spread of COVID-19, severely impeding aspects of daily life such as work, school, and tourism. Consequently, numerous economic activities were affected. Before the COVID-19 outbreak, city-center housing markets in areas surrounding popular tourist attractions performed better than did suburban housing markets because of the output of the tourism industry. This study examines the changes in the performance of city-center and suburban housing markets in regions with popular tourist attractions after the lockdown. Specifically, the dynamics of city-center and suburban housing markets in Hangzhou, where West Lake is located, and the changes in the information transfer between these housing markets after the lockdown are explored. Transaction data from January 1, 2019 to September 30, 2020 are used to perform analysis, in which adjusted housing prices and asking prices are employed to measure market performance and sellers’ pricing strategies, and transaction volume and time on the market are used to measure market liquidity and transaction frequency. The results reveal that the effects of lockdowns differ between city-center and suburban housing markets. After the lockdown, a substantial structural change is observed in the suburban housing market; the volatility risk of housing prices decreases substantially, causing an increase in transaction premiums. Housing prices and transaction volume increase in the city-center housing market after the lockdown; this is possibly because of the influence from the overall housing market booms. In addition, because sellers raise their asking prices and the transaction time is extended, the sellers in the city-center housing market are particularly influenced by the disposition effect. This leads to a reversal in the lead–lag relationship between the city center and suburban housing markets in terms of informativeness. Specifically, before the lockdown, the city-center market transfers information to the suburban market, but after the lockdown, the suburban market transfers information to the city-center market. The COVID-19 pandemic has changed the world in many aspects; this paper finds that it will also change the development pattern of the real estate market in different locations.     

Impacts of the COVID-19 crisis on single-person households in South Korea

Using nationally representative income and expenditure data from South Korea, we show that single-person households suffered a much greater decrease in household income and expenditure compared to multi-persons households during the COVID-19 pandemic in 2020. Negative effects on income were largest for the single-person households in ages 50—64, mostly driven by decreases in earned income rather than business income. There was no corresponding decrease in consumption expenditures, however, other than on transportation expenditure for young men. Notably, there were significant decreases in non-consumption expenditures that are related to formal and informal consumption-smoothing mechanisms, such as spending on insurances, pensions, and household transfers. Our findings highlight the disproportionately negative effects of the COVID-19 pandemic on the middle-aged single-person households. With reduced spending on consumption-smoothing mechanisms, this group is likely to be even more vulnerable to negative income shocks in the future.     

Epidemic and Economic Consequences of Voluntary and Request-based Lockdowns in Japan

I examine the epidemiological and economic effects of two types of lockdowns during the COVID-19 pandemic in Japan: a voluntary lockdown by which people voluntarily stayed at home in response to the risk of infection, and a request-based lockdown by which the government requested people to stay at home without legal enforcements. I use empirical evidence on these two types of lockdowns to extend an epidemiological and economic model: the SIR-Macro model. I calibrate this extended model to Japanese data and conduct some numerical experiments. The results show that the interaction of these two types of lockdowns plays an important role in the low proportion of infectious individuals and the large decrease in consumption in Japan.