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Lockdown Accounting

Gottlieb Charles (), Jan Grobovsek (), Markus Poschke () and Saltiel Fernando ()
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Gottlieb Charles: University of St. Gallen, Sankt Gallen, Switzerland
Saltiel Fernando: McGill University, Montreal, Canada

The B.E. Journal of Macroeconomics, 2022, vol. 22, issue 1, 197-210

Abstract: We use an accounting framework to evaluate the aggregate impact of a common lockdown policy for 85 countries. We find that poorer countries devote more labor to essential activities that are unaffected by the lockdown, while richer countries can more easily substitute non-essential employment with work from home. The lockdown generates an employment response that is U-shaped in income: it drops by 32% in the poorest quintile of the distribution, by 36% in the middle quintile, and by 31% in the richest quintile. Annualized GDP declines by 39% in the bottom three quintiles and by 31% in the richest quintile. Agriculture, an essential sector, is key in sustaining employment and economic activity in poorer countries.

Keywords: Covid-19; structural change; work from home; lockdown (search for similar items in EconPapers)
JEL-codes: J21 O11 O14 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1515/bejm-2020-0251

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