What Determines Social Distancing Evidence From Advanced And Emerging Market Economies

The health and economic consequences of COVID-19 are closely tied to individual compliance with recommended protective behaviors. We examine the determinants of this compliance using survey data from the COVID Behavior Tracker for 29 advanced and emerging market economies between March and December 2020. Social distancing behaviors vary significantly by age, gender, occupation, and individual beliefs about COVID-19. In addition, those who trust their government’s response to COVID-19 are significantly more likely to adopt recommended behaviors and to self-isolate if advised, highlighting the need for well-coordinated actions on the health and economic fronts. We also find that mobility restrictions, such as stay-at-home orders, and mask mandates are associated with reduced social interactions and persistent increases in compliance. Together, these drivers account for over two-thirds of the regional differences in compliance, confirming their important role in increasing social distancing and containing the pandemic.

Quick vaccine rollouts are crucial for a strong economic recovery, but vaccine hesitancy could prolong the pandemic and the need for social distancing and lockdowns. We use individual-level data from nationally representative surveys developed by YouGov and Imperial College London to empirically examine the determinants of vaccine hesitancy across 17 countries and over time. Vaccine demand depends on demographic features such as age and gender, but also on perceptions about the severity of COVID-19 and side effects of the vaccine, vaccine access, compliance with protective behaviors, overall trust in government, and how information is shared with peers. We then introduce vaccine hesitancy into an extended SIR model to assess its impact on pandemic dynamics. We find that hesitancy can increase COVID-19 infections and deaths significantly if it slows down vaccine rollouts, but has a smaller impact if all willing adults can be immunized rapidly.

This paper uses an individual-level survey conducted by the Edelman Trust Barometer in mid-April for 11 advanced and emerging market economies to examine perceptions of government performance in managing the health and economic crisis, beliefs about the future, and attitudes about redistribution. We find that women, non-college educated, the unemployed, and those in non-teleworkable jobs systematically have less favorable perceptions of government responses. Personally experiencing illness or job loss caused by the pandemic can shape people’s beliefs about the future, heightening uncertainties about prolonged job losses, and the imminent threat from automation. Economic anxieties are amplified in countries that experienced an early surge in infections followed by successful containment, suggesting that negative beliefs can persist. Support for pro-equality redistributive policies varies, depending on personal experiences and views about the poor. However, we find strong willingness to provide social safety nets for vulnerable individuals and firms by those who have a more favorable perception of government responses, suggesting that effective government actions can promote support for redistributive policies.

Abstract: We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. Sectoral supply shocks are based on the proximity requirements in each sector and the ability to work from home. Physical proximity determines the supply shock through its effect on infection rates. Sectoral demand shocks incorporate domestic and foreign demand, both of which adjust with infection rates. We calibrate demand shocks during COVID-19 using real-time credit card purchase data. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown of 39 days. Economic costs are much larger for an open economy as the shocks are amplified through the international production network. A decline in foreign demand leads to losses in domestic sectors through international input-output linkages, accounting for a third of the total output loss. In addition, the reduction in capital flows deprives the network from its trade financing needs, where sectors with larger external finance needs experience larger losses. The policy options are limited given sparse fiscal resources to fight the pandemic domestically, while serving the external debt. We present historical evidence from 2001 crisis of Turkey, when fiscal, monetary and exchange rate policies were employed altogether to deal with a triple crisis of balance of payments, banking, and sovereign debt

The COVID-19 pandemic has led to a severe global recession with differential impacts within and across countries. This paper examines the possible persistent effects (scarring) of the pandemic on the economy and the channels through which they may occur. History suggests that deep recessions often leave long-lived scars, particularly to productivity. Importantly, financial instabilities—typically associated with worse scarring—have been largely avoided in the current crisis so far. While medium-term output losses are anticipated to be lower than after the global financial crisis, they are still expected to be substantial. The degree of expected scarring varies across countries, depending on the structure of economies and the size of the policy response. Emerging market and developing economies are expected to suffer more scarring than advanced economies.

Global growth for 2018–19 is projected to remain steady at its 2017 level, but its pace is less vigorous than projected in April and it has become less balanced. Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded. Global growth is projected at 3.7 percent for 2018–19—0.2 percentage point lower for both years than forecast in April. The downward revision reflects surprises that suppressed activity in early 2018 in some major advanced economies, the negative effects of the trade measures implemented or approved between April and mid-September, as well as a weaker outlook for some key emerging market and developing economies arising from country-specific factors, tighter financial conditions, geopolitical tensions, and higher oil import bills. The balance of risks to the global growth forecast has shifted to the downside in a context of elevated policy uncertainty. Several of the downside risks highlighted in the April 2018 World Economic Outlook (WEO)—such as rising trade barriers and a reversal of capital flows to emerging market economies with weaker fundamentals and higher political risk—have become more pronounced or have partially materialized. Meanwhile, the potential for upside surprises has receded, given the tightening of financial conditions in some parts of the world, higher trade costs, slow implementation of reforms recommended in the past, and waning growth momentum.

Lockdowns imposed around the world to contain the spread of the COVID-19 pandemic are having a differential impact on economic activity and jobs. This paper presents a new index of the feasibility to work from home to investigate what types of jobs are most at risk. We estimate that over 97.3 million workers, equivalent to about 15 percent of the workforce, are at high risk of layoffs and furlough across the 35 advanced and emerging countries in our sample. Workers least likely to work remotely tend to be young, without a college education, working for non-standard contracts, employed in smaller firms, and those at the bottom of the earnings distribution, suggesting that the pandemic could exacerbate inequality. Crosscountry heterogeneity in the ability to work remotely reflects differential access to and use of technology, sectoral mix, and labor market selection. Policies should account for demographic and distributional considerations both during the crisis and in its aftermath.

Global growth is forecast at 3.0 percent for 2019, its lowest level since 2008–09 and a 0.3 percentage point downgrade from the April 2019 World Economic Outlook.