Global evidence on the economic effects of disease suppression during COVID-19

Governments around the world attempted to suppress the spread of COVID-19 using restrictions on social and economic activity. This study presents the first global analysis of job and income losses associated with those restrictions, using Gallup World Poll data from 321,000 randomly selected adults in 117 countries from July 2020 to March 2021. Nearly half of the world's adult population lost income because of COVID-19, according to our estimates, and this outcome and related measures of economic harm—such as income loss—are strongly associated with lower subjective well-being, financial hardship, and self-reported loss of subjective well-being. Our primary analysis uses a multilevel model with country and month-year levels, so we can simultaneously test for significant associations between both individual demographic predictors of harm and time-varying country-level predictors. We find that an increase of one-standard deviation in policy stringency, averaged up to the time of the survey date, predicts a 0.37 std increase in an index of economic harm (95% CI 0.24–0.51) and a 14.2 percentage point (95% CI 8.3–20.1 ppt) increase in the share of workers experiencing job loss. Similar effect sizes are found comparing stringency levels between top and bottom-quintile countries. Workers with lower-socioeconomic status—measured by within-country income rank or education—were much more likely to report harm linked to the pandemic than those with tertiary education or relatively high incomes. The gradient between harm and stringency is much steeper for workers at the bottom quintiles of the household income distribution than it is for those at the top, which we show with interaction models. Socioeconomic status is unrelated to harm where stringency is low, but highly and negatively associated with harm where it is high. Our detailed policy analysis reveals that school closings, stay-at-home orders, and other economic restrictions were strongly associated with economic harm, but other non-pharmaceutical interventions—such as contact tracing, mass testing, and protections for the elderly were not.