Direct and Indirect Effects of Covid-19 On Life Expectancy and Poverty in Indonesia

John Gibson and Susan Olivia

Bulletin of Indonesian Economic Studies, 2020, vol. 56, issue 3, 325-344

Abstract: The spread and threat of Covid-19 have resulted in unprecedented economic and public health responses in Indonesia and elsewhere. We analyse the direct and indirect effects of Covid-19 on life expectancy and poverty in Indonesia, and the responses to the virus. We view life expectancy and poverty as indicators of quantity and quality of life. Our analysis shows that the indirect effects on life expectancy, which operate through lower future income, exceed the direct effects of Covid-19-related deaths by at least five orders of magnitude. The reduction in long-run real income due to the Covid-19 shock may reduce life expectancy by up to 1.7 years, compared with what could otherwise be expected. In contrast, even if the Covid-19 death toll to date were 40 times worse, life expectancy would fall by just two days. Given this imbalance between direct and indirect effects, any interventions to reduce the risk of Covid-19 must be finely targeted and must consider indirect effects. Our analysis of the geographic pattern of poverty effects, which is based on near real-time mobility data, discusses how targeted interventions that are less fiscally costly could be developed. Such interventions should pose less of a threat to future growth and may help to reduce the indirect effects of the Covid-19 shock.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1080/00074918.2020.1847244 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:bindes:v:56:y:2020:i:3:p:325-344

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CBIE20

DOI: 10.1080/00074918.2020.1847244

Access Statistics for this article

Bulletin of Indonesian Economic Studies is currently edited by Firman Witoelar Kartaadipoetra, Arianto Patunru, Robert Sparrow, Sarah Xue Dong and Sean Muir

More articles in Bulletin of Indonesian Economic Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().