THE ECONOMIC IMPACTS OF COVID-19: EVIDENCE FROM A NEW PUBLIC DATABASE BUILT USING PRIVATE SECTOR DATA
By Raj Chetty, John N. Friedman, Michael Stepner. Quarterly Journal of Economics, 2023
679 citations recorded by the source corpus.
We build a publicly available database that tracks economic activity in the United States at a granular level in real time using anonymized data from private companies. We report weekly statistics on consumer spending, business revenues, job postings, and employment rates disaggregated by county, sector, and income group. Using the publicly available data, we show how the COVID-19 pandemic affected the economy by analyzing heterogeneity in its effects across subgroups. High-income individuals reduced spending sharply in March 2020, particularly in sectors that require in-person interaction. This reduction in spending greatly reduced the revenues of small businesses in affluent, dense areas. Those businesses laid off many of their employees, leading to widespread job losses, especially among low-wage workers in such areas. High-wage workers experienced a V-shaped recession that lasted a few weeks, whereas low-wage workers experienced much larger, more persistent job losses. Even though consumer spending and job postings had recovered fully by December 2021, employment rates in low-wage jobs remained depressed in areas that were initially hard hit, indicating that the temporary fall in labor demand led to a persistent reduction in labor supply. Building on this diagnostic analysis, we evaluate the effects of fiscal stimulus policies designed to stem the downward spiral in economic activity. Cash stimulus payments led to sharp increases in spending early in the pandemic, but much smaller responses later in the pandemic, especially for high-income households. Real-time estimates of marginal propensities to consume provided better forecasts of the impacts of subsequent rounds of stimulus payments than historical estimates. Overall, our findings suggest that fiscal policies can stem secondary declines in consumer spending and job losses, but cannot restore full employment when the initial shock to consumer spending arises from health concerns. More broadly, our analysis demonstrates how public statistics constructed from private sector data can support many research and real-time policy analyses, providing a new tool for empirical macroeconomics.
Subfields: Economics and Econometrics, General Health Professions, Social Psychology
View Paper: https://www.semanticscholar.org/paper/67ad26d9303467b503eb3a6fce7bc0b0c20892e1
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Citations in the corpus
- Heterogeneous Labor Market Impacts of the COVID-19 Pandemic (2020, methodology): “…Coibion, Gorodnichenko, and Weber (2020), who used data from the Nielsen Homescan panel; Bartik et al. (2020), who used data from Homebase; and Chetty et al. (2020), who built a database that tracks economic activity at a granular level in real time using anonymized data from various private…”
- Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior (2020, background): “And Chetty et al. (2020) measure aggregate changes in mobility and spending during the COVID-19 pandemic.”
- The Impact of Covid-19 on Productivity (2020, neutral): “Baqaee and Farhi (2022) show that negative sectoral supply shocks can be stagflationary and can be amplified by complementarities in production, Chetty et al. (2020), Forsythe et al. (2020) and Cajner et al. (2020) show large and heterogeneous labor 6 It is perhaps odd to think of the pandemic as…”