From bad to worse: The economic impact of COVID-19 in developing countries
Evidence from Venezuela
Keywords:COVID-19, Economic impact, Developing countries
COVID-19 generated economic lockdowns around the world as the main policy response, hitting economically harder on developing countries. These lockdowns included the shutdown of the main statistical exercises, making it almost impossible to assess the breadth and variety of their effects. Using a phone survey, this paper examines the impact on household welfare of the quarantine implemented in Venezuela. The identification strategy exploits the exogenous variation in the severity of the lockdown in different regions of the country. The main results indicate that there has been a 17 percent reduction in employment while in regions with a more enforced quarantine, the reduction has been 13.4 percent more severe. In particular, the self-employed and informally employed were hardly hit by the lockdown. These effects translate to a reduction of household labor income. Results provide evidence of the economic cost of these policies and calls for alternative policies to deal with COVID-19.
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Copyright (c) 2021 German Caruso Olivera, Lautaro Chittaro, Maria Cucagna Freixes, Luis Pedro Espana
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