Lockdown policies affect middle-income countries the strongest
St.Gallen – An international team of researchers including those from the University of St.Gallen studied the impact of lockdown policies on employment and GDP in several countries. They found that middle-income countries were most strongly affected.
In response to the COVID 19 outbreak, 114 countries implemented policies that have closed workplaces or required working from home, according to a press release from the University of St. Gallen (HSG). A team of researchers from the HSG, the University of Edinburgh, McGill University in Montreal and Duke University in North Carolina studied the impact of these lockdown measures on employment and GDB for a broad cross-section of countries.
The study looked at differences in the ability for people to work from home in the various countries as well as the differences in occupational sectors of those countries. According to the researchers, these two parameters are responsible for the fact that the lockdown policies targeting the same set of sectors may produce unequal outcomes in different economies.
The researchers found that poor countries have a lower potential for occupations that are suitable for working from home. However, these countries concentrate employment and value-added in essential sectors that have not been shut down by the lockdown policies.
High-income countries, in contrast, “have a substantially higher work from home ability, which mitigates declines in employment and GDP due to lockdown of non-essential sectors”, explains the HSG.
Middle-income countries have experienced the largest declines “as they feature relatively large employment shares in non-essential sectors and relatively low work from home ability”.