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Employment effects of COVID‐19 across Chilean regions: An application of the translog cost function

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  • Félix Modrego
  • Andrea Canales
  • Héctor Bahamonde

Abstract

Estimating an aggregated translog cost function for the period 2013–2018, and using alternative scenarios of product loss based on expert projections, this article provides a preliminary forecast of the regional employment effects of COVID‐19 across Chilean regions. The total estimated loss in the average scenario was around 705,000 jobs (577,000 in the optimistic and 870,000 in the pessimistic scenarios). Relative impacts were spatially heterogeneous, ranging from 1.5% (Antofagasta Region) to 13.6% (Los Lagos Region) of total regional jobs in the average scenario. Estimated impacts may inform regionally‐targeted social protection and economic stimulus policies at a time in which the virus has not fully spread and total regional employment impacts have not been realized. In any region and scenario, estimated losses were sizeable and call for rapid and spread implementation of job and production protection initiatives recently passed as well as others still being discussed in congress. Este artículo ofrece un pronóstico preliminar de los efectos de COVID‐19 en el empleo regional en las regiones de Chile, para lo cual estima una función de costos translog agregados para el período 2013–2018 y utiliza escenarios alternativos de pérdida de producto basados en las proyecciones de expertos. La pérdida total estimada en el escenario promedio fue de alrededor de 705.000 puestos de trabajo (577.000 en el escenario optimista y 870.000 en el pesimista). Los impactos relativos fueron heterogéneos espacialmente, y variaron entre el 1,5% (Región de Antofagasta) y el 13,6% (Región de Los Lagos) del total de empleos regionales en el escenario promedio. Los impactos estimados pueden informar políticas a nivel regional específicas en cuanto a protección social y estímulo económico en un momento en que el virus no se ha propagado plenamente y no ha tenido lugar la totalidad de los impactos sobre el empleo en la región. En todas las regiones y escenarios, las pérdidas estimadas fueron considerables y exigen la aplicación rápida y generalizada de las iniciativas de protección del empleo y la producción aprobadas recientemente, así como otras que todavía se están debatiendo en el congreso. 本稿では、2013~2018年の集約的なトランスログ費用関数を推定し、専門家の予測に基づく、製品損失の代替的シナリオを用いて、チリ全体の地域におけるCOVID‐19の雇用の地域的効果の予備的予測を行う。平均的なシナリオにおける総推定損失は約705,000人(楽観的なシナリオで577,000、悲観的なシナリオで87万)であった。相対的な影響は空間的に不均一であり、平均的なシナリオでの地域全体の雇用の1.5%(アントファガスタ州)から13.6%(ロス・ラゴス州)であった。推定された影響は、まだウイルスが完全には拡散せず、地域の雇用への影響が完全に現れていない時点で、地域を対象とした社会保護と経済刺激政策に資する可能性がある。いずれの地域およびシナリオにおいても、推定される損失はかなりのものであり、最近可決された雇用保護および生産保護に関するイニシアティブの迅速かつ広範な実施が求められているが、他にも今なお議会で議論されている政策案もある。

Suggested Citation

  • Félix Modrego & Andrea Canales & Héctor Bahamonde, 2020. "Employment effects of COVID‐19 across Chilean regions: An application of the translog cost function," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(6), pages 1151-1167, December.
    • Handle: RePEc:bla:rgscpp:v:12:y:2020:i:6:p:1151-1167
    DOI: 10.1111/rsp3.12337
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    2. Nana Liu & Zeshui Xu & Marinko Skare, 2021. "The research on COVID-19 and economy from 2019 to 2020: analysis from the perspective of bibliometrics," Oeconomia Copernicana, Institute of Economic Research, vol. 12(2), pages 217-268, June.
    3. Félix Modrego & Jorge Ortega & Lenia Planas & Álvaro Astudillo, 2022. "Foreign Direct Investment Elasticities of Output, Labor, and Wages in Chile: A Simultaneous Equations Approach," Economies, MDPI, vol. 10(12), pages 1-21, November.
    4. Eduardo Rodrigues Sanguinet & Augusto Mussi Alvim & Miguel Atienza & Adelar Fochezatto, 2021. "The subnational supply chain and the COVID‐19 pandemic: Short‐term impacts on the Brazilian regional economy," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(S1), pages 158-186, November.
    5. Xi He & Edward J. Balistreri & Gyu Hyun Kim & Wendong Zhang, 2022. "A general equilibrium assessment of COVID-19's labor productivity impacts on china's regional economies," Journal of Productivity Analysis, Springer, vol. 58(2), pages 129-150, December.

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