Published : 2022-09-29

Are pandemics and stay-at-home orders economic factors? An analysis of their impact on employment and consumption in the USA

Alexander Shemetev



Martin Pelucha



Abstract

The objective of this paper is to analyse the impact on consumption and employment of state-level stay-at-home orders (SHO) in the USA at the state and county levels. Moreover, it answers the following research question: Can SHO have non-negative effects on consumption (heterogeneity across sectors) and some elements of employment (heterogeneity across wages and sectors)? The data contain proxy variables (high-frequency data on credit and debit card spending and job positions). This research utilises the data on the pandemic and public stay-at-home orders for all US states in 2020,
applying the fixed effects (LSDV) difference-in-differences approach to answer the research question and obtain the empirical results. The overall findings indicate that the non-negative outcomes of stay-at-home orders on consumption, and some elements of employment, are possible. In addition, this
research justifies the possibility of applying depersonalised high-frequency data for economic analysis. Furthermore, the empirical evidence supports the hypothesis that SHO can be an economic factor influencing both consumption and employment. Thus, certain regions can pursue independent policies
to counter the pandemic and similar threats, while not fearing that such orders will necessarily affect the unemployment rate and citizens’ consumption (hence, fulfilling the precautions and measures that are suggested in the present paper).

Keywords:

pandemics, personal consumption, employment, USA



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Shemetev, A. ., & Pelucha, M. . (2022). Are pandemics and stay-at-home orders economic factors? An analysis of their impact on employment and consumption in the USA. Forum Scientiae Oeconomia, 10(3), 169–188. https://doi.org/10.23762/FSO_VOL10_NO3_9

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