“Stay at home (if you can)”: informal employment and COVID-19 in Mexico

Joana Cecilia Chapa Cantú (), Carlos Emmanuel Saldaña Villanueva () and Edgar Mauricio Luna Domínguez ()
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Joana Cecilia Chapa Cantú: Facultad de Economía Universidad Autónoma de Nuevo León
Carlos Emmanuel Saldaña Villanueva: Facultad de Economía Universidad Autónoma de Nuevo León
Edgar Mauricio Luna Domínguez: Facultad de Economía Universidad Autónoma de Nuevo León

Revista Finanzas y Politica Economica, 2023, vol. 15, issue 1, 135-155

Abstract: This paper explores the relationship between residential confinement to reduce the spread of the COVID-19 virus, seen as a public policy, and how it affects the informal labor sector, as well as the responseof individuals to the pandemic in the states of Mexico. Forming panels for various levels of informality applied to panel vector auto-regressive (PVAR) shows that staying at home as public policy becomes more effective as informality decreases. In addition, the response of individuals to an increase in the spread of the pande-mic depends on the level of informality: for states with lower rates of informality, individuals respond to a higher concentration of residential confinement. But for states with a higher level of informality, the evidence is not significant. The paper considers the role of informality in the development of an effective public policy.

Keywords: Covid-19; stay-at-home; panel VAR; informal employment; México (search for similar items in EconPapers)
JEL-codes: C34 F69 I12 I18 J46 Z18 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:col:000443:020962

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