UC Davis Agricultural and Resource Economics

New American Journal of Agricultural Economics Article Co-Authored by ARE Researchers Examines Economic Impacts of Covid-19 Lockdown in a Remittance-Dependent Region

Feb. 4, 2021

ARE Ph.D. candidates Miki Khanh Doan and Aleksandr Michuda co-authored the recently published report along with ARE Researcher Heng Zhu and lead author, ARE Ph.D. alumni Anubhab Gupta, now assistant professor at Virginia Tech. The report examines the economic impacts of Covid-19 lockdowns on poor and vulnerable households living in rural areas of developing countries. Using weekly micro-survey data the authors quantified the impact of lockdown and compared it to long-term averages. The findings show that for a relatively poor region in India with high out-migration, households lost 88% local income and 63% remittance income due to the lockdown. The results of the paper provide critical insight for policymakers as they consider ongoing responses to the Covid-19 pandemic and future pandemics, with the authors concluding:

“Dealing with this economic crisis for the poor may call for interventions by the government and other local agencies in the rural areas of developing countries…. However, disbursement of such relief programs cannot possibly be instantaneous. The long‐term effects of COVID‐19 remain to be seen, but it is important to keep in mind that such prolonged negative shocks can lead to persistent poverty trap dynamics. Some of the sustained negative impacts of lockdowns for the rural poor may be mitigated or prevented by timely and continuous support in the form of government interventions. This paper shows how high‐frequency data can provide insight into the immediate short‐run impacts of large shocks on rural poor households and emphasizes the importance of future research to investigate the longer term impacts of severe pandemics like COVID‐19 on the poor and the vulnerable.”


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