A new GLO Discussion Paper documents the socioeconomic determinants of COVID-19 stay-at-home orders’ compliance in the U.S. using cell phone data.Stay-at-home orders reduce mobility by about 8-10 percentage points; high-trust counties decrease their mobility significantly more than low-trust counties post-lockdown.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: Better understanding whether and how communities respond to government decisions is crucial for policy makers and health officials in response to the COVID-19 pandemic. In this study, we document the socioeconomic determinants of COVID-19 stay-at-home orders’ compliance in the U.S. Using cell phone data measuring changes in average distance traveled and non- essential visitation, we find that: stay-at-home orders reduce mobility by about 8-10 percentage points; high-trust counties decrease their mobility significantly more than low-trust counties post-lockdown; and counties with relatively more self-declared democrats decrease significantly more their mobility. We also provide evidence that the estimated effect on compliance post-lockdown is especially large for trust in the press, and relatively smaller for trust in science, medicine or government.
The Journal of Population Economics welcomes submissions dealing with the demographic aspects of the Coronavirus Crisis.After fast refereeing, successful papers are published in the next available issue. An example:
A new GLO Discussion Paper suggests that people’s mental health may have been severely affected by the lockdowns executed during the COVID-19 crisis.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: The COVID-19 pandemic has led many governments to implement lockdowns. While lockdowns may help to contain the spread of the virus, they may result in substantial damage to population well-being. We use Google Trends data to test whether the lockdowns implemented in Europe and America led to changes in well-being related topic search terms. Using differences-in-differences and a regression discontinuity design to evaluate the causal effects of lockdown, we find a substantial increase in the search intensity for boredom in Europe and the US. We also found a significant increase in searches for loneliness, worry and sadness, while searches for stress, suicide and divorce on the contrary fell. Our results suggest that people’s mental health may have been severely affected by the lockdown.
A related paper using Google Trends has studied the health and wellbeing consequences of the Great Recession:
The Journal of Population Economics welcomes submissions dealing with the demographic aspects of the Coronavirus Crisis.After fast refereeing, successful papers are published in the next available issue. An example:
A new GLO Discussion Paper studies the causal impact of maternal domestic violence on the nutritional status of young children.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: In this paper, we empirically estimate the causal impact of maternal domestic violence on the nutritional status of her children aged below five years. Using detailed dataset from the current and fourth round of the National Family Health Survey, we find robust evidence that violence experienced by mothers at the hands of her husband significantly increases the likelihood of her children being malnourished. When we focus on identifying the pathways through which domestic violence affect child health outcomes, we find that while domestic violence primarily affects child health via deterioration in maternal health, neglect of children in terms of inadequate provision of essential child care also seem to matter. The results from the heterogeneity analysis finally suggest that the detrimental effect of such violence is significantly less pronounced for children born to mothers who are currently working and are thus empowered.
Third IESR-GLO Joint Conference. The Institute for Economic and Social Research (IESR) at Jinan University and the Global Labor Organization (GLO) are jointly organizing a virtual conference on economic issues related to the coronavirus (Covid-19) pandemic. We provide a platform for economists to exchange ideas on improving responses to Covid-19 through a series of presentations of high-quality academic papers.
We are pleased to announce that the conference will feature keynote addresses by Daron Acemoglu (MIT) and Charles Manski (Northwestern University).
The conference will be held from June 5 (Friday) to June 7 (Sunday) through Zoom Webinar.Examine the full program with all speakers and detailed time schedule under https://iesr.jnu.edu.cn/Program_23221/list.htm
The conference is supported by theJournal of Population Economics. The Journal welcomes submissions dealing with the demographic aspects of the coronavirus crisis.
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GLO Policy Brief No. 3 – Special theme: COVID-19 and policy implications
COVID-19 and the Consequences for Free Trade
by Ewa Björling, Andreas Hatzigeorgiou, Magnus Lodefalk & Fredrik Sjöholm
The response to the COVID-19 pandemic has disrupted global trade, investment and value chains. There is a risk that newly imposed barriers to international trade and mobility will become permanent. Research shows that veiled protectionism in the wake of the COVID-19 pandemic would be associated with greater risks and impede the economic recovery needed to avoid a new economic depression. We argue that failing to reboot free trade and to restore global value chains could aggravate an already difficult and delicate situation in regard to global economic development and poverty reduction. In order to reboot globalization, however, there needs to be a new approach. Simply going over old ground would be insufficient. ____________________
Ewa Björling
Andreas Hatzigeorgiou
Magnus Lodefalk
Fredrik Sjöholm
Ewa Björling, MD, Associate Professor of Virology, Sweden’s Minister for Trade 2007-2014.
Andreas Hatzigeorgiou, PhD, CEO of the Stockholm Chamber of Commerce.
Magnus Lodefalk, PhD, Associate Professor of Economics, Örebro University; Ratio Institute, Sweden; and Fellow of the Global Labor Organization.
Fredrik Sjöholm, PhD, Professor of International Economics, Lund University, and the Research Institute of Industrial Economics, Sweden.
What we should know
Restrictions and lockdowns to address the COVID-19 pandemic have disrupted international markets and global value chains. The travel and trade restrictions imposed by many countries are extreme and unusual both in nature and their implementation, wreaking havoc on global trade and investment flows. These restrictions have been adopted despite lack of evidence of their effectiveness. Some measures go against the guidance by the World Health Organization (WHO) and the World Trade Organization (WTO).
Protectionism and anti-globalization tides have been rising already before the COVID-19 pandemic, with Brexit and the China-U.S. trade war, as two examples. The policy response to the pandemic now risks to make the situation worse and constitutes a major disruption to global trade, investment and value chains. Early economic indicators suggest that this disruption is severely hurting growth and employment (Gopinath 2020).
Global poverty and inequality are grounds for justifiable concerns. Research suggests that failing to ensure free and predictable markets would be associated with significant risks to poverty and inequality.
Many policies to combat the coronavirus pandemic are actually causing both short-term problems for fighting the pandemic, as well as risks in regard to economic recovery, employment, development and poverty reduction over the medium and long term (Evenett 2020, Hoekman et al 2020, Zimmermann et al. 2020).
Difficulties in getting supplies of medical equipment have triggered an increased interest in de-globalizing value chains (Miroudot 2020). Already before the pandemic, companies and countries were considering a regionalization or even a nationalization of global value chains. This due to a more adverse trade policy environment, rising wages in manufacturing strongholds and technological advances, e.g., in automation.
The state of free trade in the wake of COVID-19
Unilaterally imposing high travel and trade barriers creates uncertainty for exporters and importers of goods and services, as well as for foreign investors. Research indicates that uncertainty about the stability of the rules of the game has a major negative impact on trade and investment, beyond the barriers imposed by the rules themselves (see, e.g., Handley and Limao 2013).
Temporary policies risk becoming permanent. They could become precedents for trade barriers and unilateralism in the future.
Asymmetric timing for when countries reopen and assymetric epidemiological strategies, pose real risks of triggering protectionism (Bown 2020). For example, when one country is back to full production and shipping, countries that still have not reopened their economies will likely face rising pressure to ‘protect’ domestic businesses.
Less-developed countries are more exposed to the risks associated with a failure to reboot and revitalize international trade, investment and value chains. They often face additional difficulties in handling the pandemic itself because of their relatively weaker health care systems. Existing and new trade barriers, such as export restrictions on medical products and food, will exacerbate this situation (Hoekman et al. 2020). Moreover, capital is now fleeing from poor to richer countries. The poorest and most debt-ridden countries can thus be hit twice in the form of the pandemic, and globalization in reverse.
A reboot and a new approach to globalization is needed
In the short term, a coordinated approach among the major economies on measures to address both the pandemic and its economic consequences are needed. A first step should be to tear down the border and trade barriers put up in the wake of the pandemic (Stellinger et al 2020).
In the short to medium term, it is necessary to formulate a strategy to reduce the risks from asymmetric timing in reopening and from differences in the fight against the pandemic.
A head-on measure would be to introduce a new free trade and investment agreement that abolish all tariffs and other barriers to trade and investment in pharmaceuticals, medical devices, and other equipment used to prevent or combat pandemics (Bown 2020b, Stellinger et al 2020).
Business leaders should act to encourage more resilient and sustainable global value chains, for example by having more suppliers, warehouses and using modern technology to monitor the chains and their resilience in real time (Miroudot 2020). This would be a win-win for the climate and for economic growth.
Governments must refrain from top-down attempts to address current and future difficulties of getting supplies by reshoring production of various goods and services (Stellinger et al. 2020). There is ample research on the harmfulness of import-substitution policies.
In the longer term, countries need to safeguard both global health and prosperity through common strategies and commitments, concrete measures for future crises and mechanisms for consultations. New and even more serious pandemics cannot be excluded. Countries will have to be able to act quickly, in a coordinated fashion and in a transparent way.
A new approach is needed to reboot and revitalize globalization, with the aim to design a system which reduces the risk of both pandemics and protectionism.
Mechanisms for applying and enforcing stringent requirements on countries to live up to standards and obligations put in place to minimize the risk of pandemics should be evaluated.
The concept of sustainability within the global trading system could be extended to encompass not only environmental and social aspects, but also aspects that more clearly impact public health and epidemiological risks. Increased cross-institutional links between bodies such as the WHO and the WTO should also be created to promote knowledge exchange and technical assistance.
The policy response to the COVID-19 pandemic has disrupted international markets. However, simply restoring free trade would mean ignoring massive human suffering caused by the COVID-19 pandemic. A new approach is needed to reboot and revitalize globalization, with the aim to design a system which reduces the risk of both pandemics and protectionism. Leaders and policymakers must make concerted efforts to: carefully lift restrictions on travel and trade while protecting health; commit to liberalize essential trade for fighting pandemics; address how to deal with calls for protecting domestic industries in the presence of asymmetric economic reopening; and sustain international yet resilient value chains. The aim should be to develop the international trading system to both reduce the risks of pandemics and protectionism. __________________
References
Bown, C. (2020a). “COVID-19 could bring down the trading system: How to stop protectionism from running amok.”, Foreign Affairs, May/June 2020.
Hoekman, B.M., Fiorini, M. and A. Yildirim (2020). “Export restrictions: a negative-sum policy response to the COVID-19 crisis.”, EUI RSCAS Working Paper 2020/23.
A new GLO Discussion Paper finds that individuals who sleep for at least 6 hours have improved mental health and are less likely to have suicidal thoughts.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: One in every six U.S. adults suffers from mental health problems. Mental illnesses, as measured in disability-adjusted life years, account for nearly 6.2% of the total disease burden worldwide and are considered to be one of the leading causes of death by injury, second only to road accidents. For the year 2010 alone, the estimated global direct and indirect economic cost of mental illnesses was reported to be US$2.5 trillion and this is expected to double by 2030. With a “20% increase in service coverage for severe mental disorder”, suggested by the World Health Assembly by the year 2020 for the WHO Member states, examining alternative behavioral changes to reduce mental health problems are worth examining. Using the detailed National Longitudinal Study of Adolescent Health dataset and applying a wide range of econometric techniques we study the causal impact of sleeping pattern on various subjective wellbeing indicators among young U.S. adults. We find robust evidence that individuals who sleep for at least 6 hours have improved mental health and are less likely to have suicidal thoughts. Additionally, our estimates highlight that those who sleep early have better mental health and reduced probability of having suicidal thoughts or going to a counselor. Waking up early is also found to result in better physical health and lower probability of having suicidal thoughts.
A new GLO Discussion Paper finds that intergroup contact reduces the prejudice of both Hindu and Muslim participants toward members of the other religion, but most of the effects disappear after six months.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: We study the potential for pleasant and cooperative contact to reduce preconceived prejudice between religious groups in the context of India. We randomly assign Hindus and Muslims into groups, in which they interact over the course of a week-long vocational training program. We find that intergroup contact reduces the prejudice of both Hindu and Muslim participants toward members of the other religion one week after the training program finished. While we find that most of the positive effect of intergroup contact on reducing prejudice dissipates after six months, the baseline results for Hindu attitudes toward Muslims are persistent.
Social distancing requirements associated with COVID-19 have led to school closures affecting more than 90 percent of the world’s learners: 1.5 billion children and young people. A new GLO Discussion Paper finds that the expected earnings loss resulting from this is equivalent to 15 percent of future gross domestic product.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: Social distancing requirements associated with COVID-19 (coronavirus) have led to school closures. In mid-April, the United Nations Educational, Scientific and Cultural Organization reported that 192 countries had closed all schools and universities, affecting more than 90 percent of the world’s learners: 1.5 billion children and young people. The closures are expected to reduce learning and will lead to future losses in earnings and labor productivity. Schooling attainment leads to increased earnings. What is not known is how much earnings will decline due to the school closures. Starting with the fact that every year of schooling equates to 8-9 percent in additional future earnings, this paper uses the number of months of education closures to estimate the loss in marginal future earnings. The findings show that the school closures reduce future earnings, and this loss is equivalent to 15 percent of future gross domestic product. The school closures will have a large and long-lasting impact on the earnings of future workers. It is also likely that students from low-income countries will be affected most. These estimates are conservative, assuming that the closures will end after four months and school quality will not suffer.
The Journal of Population Economics welcomes submissions dealing with the demographic aspects of the Coronavirus Crisis.After fast refereeing, successful papers are published in the next available issue. An example:
Why has Slovakia, a small open economy, done so well with low mortality rates in response to the crisis? And what to do now in face of an expected huge recession? Some insights from an interview with top policy advisor Martin Kahanec.
Some core messages of the interview:
Slovakia has done a tremendous job stopping the spreading of the virus, for instance the low mortality rate put the country at the very last place in the ranking in Europe.
The success can be traced back not so much to a rigorous, but to a fast and effective response.
But the Slovak economy is paying a huge price for the shutdowns in the country and among the trade partners.
Income maintenance schemes to strengthen the demand side and measures to preserve liquidity to grease the wheels of the economy are essential for a fast recovery.
My role in the advisory body of the Slovak government is to evaluate crisis management procedures and risks and assess possible measures and their effects.
GLO Fellow and GLO Cluster Lead “Labor Mobility” Martin Kahanec (Central European University and Bruegel) is also the Director of the Slovak Think Tank CELSI. He was just appointed by his government to the Slovak COVID-19 Economic Crisis Council. He reports on the Slovak experiences and the way to recovery.
Middle photo by Mika Baumeister on Unsplash
Interview
GLO:How well did Slovakia get through the COVID-19 crisis in terms of infections and death cases?
Martin Kahanec: Slovakia has done a tremendous job stopping the spreading of the virus. After more than 11 weeks since its first case of COVID-19, recorded on March 6, 2020, as of 25 May 2020 Slovakia had only 1,513 cases (of which only 163 active). Its 5 deaths per million inhabitants (28 in total) put Slovakia at the distant last place in the ranking of European countries by this mortality measure. For comparison, during the same period (eleven weeks into the pandemic) similarly-sized Ireland recorded more than 16 times as many cases and more than 55 times as many deaths and Denmark more than 7 times as many cases and nearly 20 times as many deaths. In spite of local outbursts in care homes and marginalized Roma settlements, the “first wave” of the pandemic in Slovakia was only a wavelet, as the country has to date recorded only 6 days with more than 50 new cases.
For the record, this result is not an issue of (the lack of) testing or isolation of the country: per million of inhabitants Slovakia has done fewer tests than Denmark, but more than Sweden, France, or the Netherlands, and just about as many as Finland. Slovakia is a small open economy with a very busy international transportation system, and the share of cross-border workers is the highest in Europe, at about 5.2% of its labor force – many of whom work in care homes and touristic resorts in Austria and northern Italy. Slovaks spend on average more nights abroad than Czechs, Italians, or Spaniards. Bratislava and Vienna are among the closest national capitals in the world, just about 65 km apart, Czechia is about the same distance from Bratislava, and Hungary, just like Austria, share borders with Slovakia.
GLO: Is this success the result of a more rigorous Slovak response strategy?
Martin Kahanec: Perhaps not as much rigorous as speed. Within ten days since the first case, Slovakia had shut down schools (in Bratislava within less than a week), introduced mandatory face masks in public transportation (first in Europe), closed non-essential shops, introduced border controls and mandatory quarantine for people returning from abroad (within a week), and shut down international air as well as bus and train passenger services. An important factor has been the impressive compliance of the general public, with face masks becoming the norm immediately, with politicians and television celebrities as well as news anchors leading by example and wearing facemasks on all occasions. Several mistakes have been made, but overall the system of measures has worked effectively.
GLO: What were the consequences in terms of GDP losses?
Martin Kahanec: Slovakia is paying a hefty price for the shutdowns in the country and among our trade partners. Primarily due to weakened foreign demand, in Q1 2020 Slovak GDP shrank by 3.9% y-o-y, which was one of the largest drops in Europe. Fitch has downgraded Slovakia from A+ to A on May 8. In April 2020 the unemployment rate increased by 1.38 percentage points y-o-y. On the other hand, the government is now gradually removing the restrictions, and the automotive sector, one of the backbones of the Slovak economy, is rebounding, with the four large car making plants in Slovakia (VW, PSA, Kia, Land Rover) gradually returning to their capacity.
GLO: What can be done to foster a fast recovery?
Martin Kahanec: During the trough of the crisis the government should help those who have been hit the hardest and lost their livelihoods. This moral obligation is strengthened by the fact that keeping especially the workers with the highest risks of spreading the virus at home reduces the negative externality their continued activity would inflict on the rest of the society and that, for this reason, some sectors were shut down directly by the government. For a swift recovery, as soon as the epidemiological situation permits, workers should be allowed to return to jobs and children to schools. Effective testing, tracing, and isolating of the cases is needed to avoid a possible second wave.
Income maintenance schemes to strengthen the demand side and measures to preserve liquidity to grease the wheels of the economy are essential. For Slovakia, as a small open economy, coordination with its key trading partners and, especially, at the European level is of key importance.
But it is important to understand that the crisis will make some products, services, or even sectors obsolete, and it will open new opportunities and avenues for innovative economic activities at the same time. Therefore, what will matter in the long run is how the measures adopted will facilitate the reallocation of resources to the most promising economic endeavors, rather than cementing them in those, which have no economic future.
GLO: You have been just appointed to the Slovak COVID-19 Economic Crisis Council; what is the role of this council?
Martin Kahanec: The Economic Crisis Council is a temporary advisory and coordinating body at the Ministry of Finance during the COVID-19 crisis. Its purpose is to evaluate crisis management procedures and risks for the development of the Slovak economy and assess possible measures and their effects. We elaborate on specific proposals in response to the economic crisis caused by the global COVID-19 pandemic in Slovakia.
************* With Martin Kahanec spoke Klaus F. Zimmermann, GLO President.
The Journal of Population Economics welcomes submissions dealing with the demographic aspects of the Coronavirus Crisis.After fast refereeing, successful papers are published in the next available issue. An example:
A new GLO Discussion Paper finds that the stronger the employment protection for regular contracts, the smaller is earnings mobility, although the effect is stronger among women of high reproductive age.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
GLO Fellows Elena Bárcena-Martín & Salvador Pérez-Moreno
Author Abstract: This paper explores potential gendered effects of employment protection on earnings mobility, differentiating between upward and downward movements. We conduct a micro-macro mobility analysis for 23 European countries over the economic downturn period 2008–2014. The results confirm that, overall, the higher the protection for regular contracts, the lower the earnings mobility (either upwards or downwards) although the effect is stronger among women of high reproductive age. Nevertheless, protection for temporary employment seems to be only associated with reduced downward earnings mobility when considering transitions into and out of employment, with no gender differential effect.
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