Publication Type

Journal Article

Version

submittedVersion

Publication Date

2-2022

Abstract

We examine the short-term impact of COVID-19 on consumption spending and labor market outcomes. Using monthly panel data of individuals mainly aged 50–70 in Singapore, we find that COVID-19 reduced consumption spending and labor market outcomes immediately after its outbreak, and its negative impact quickly evolved. At its peak, the pandemic reduced total household consumption spending by 22.8% and labor income by 5.9% in April. Probability of full-time work also went down by 1.2 pp and 6.0 pp in April and May, respectively, but employment and self-employment were only mildly affected. Our heterogeneity analysis indicates that the reduction in consumption spending was greater among those with higher net worth, while the decreases in labor market outcomes were greater among those with lower net worth. However, we find little evidence that those in worse health status experienced larger reductions in consumption spending and labor market outcomes. Reductions in consumption spending correlated with increased risk avoidance behavior, the nationwide partial lockdown, worsening economic outlook, and reduced income.

Keywords

COVID-19, pandemic, consumption spending, labor market, monthly panel data, Singapore

Discipline

Asian Studies | Behavioral Economics | Public Health

Research Areas

Applied Microeconomics

Publication

Canadian Journal of Economics

Volume

54

Issue

SI

First Page

115

Last Page

134

ISSN

0008-4085

Identifier

10.1111/caje.12538

Publisher

Wiley

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1111/caje.12538

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