THE ECONOMIC EFFECTS OF COVID-19 MITIGATION POLICIES ON UNEMPLOYMENT AND ECONOMIC POLICY UNCERTAINTY

  • Anasuya Haldar National Institute of Technology Rourkela
  • Narayan Sethi National Institute of Technology Rourkela, India
Keywords: COVID-19, Unemployment rate, Vaccination drive, Policy Uncertainty

Abstract

This paper examines the effects of government COVID-19 mitigation strategies and Economic Policy Uncertainty (EPU) on unemployment-rate over the period November 2019 to April 2021 for the 16 most severely COVID-19 affected countries. Our specific objectives are threefold: first, to examine the dynamic relationship between EPU and unemployment-rate; second, to analyze the extent to which government’s COVID-19 mitigation response affects the unemployment-rate; and third, to examine indirectly the effects of government economic policies on the unemployment-rate through market indicators, such as the business and consumer confidence indices. We find that EPU increases fluctuations in unemployment for the COVID-19 affected countries, while governments’ vaccination drive significantly reduces it. Increases in government stringency aggravate unemployment in the informal sectors and enhances labor inequality.

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Published
2022-01-31
How to Cite
Haldar, A., & Sethi, N. (2022). THE ECONOMIC EFFECTS OF COVID-19 MITIGATION POLICIES ON UNEMPLOYMENT AND ECONOMIC POLICY UNCERTAINTY. Buletin Ekonomi Moneter Dan Perbankan, 25, 61 - 84. https://doi.org/10.21098/bemp.v25i0.1833