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A first aid kit to assess welfare impacts

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  • Kawata, Keisuke
  • Sato, Yasuhiro

Abstract

We develop a simple framework to measure the impacts of an economic shock on unemployed workers’ welfare quantitatively. We follow the sufficient statistics approach in consulting traditional economic models, and use a standard job search model to derive the sufficient statistics to identify the impacts. We then apply our framework to assess the impacts of the coronavirus disease 2019 (COVID-19) by using regional data of the United States, and international data. Analysis reveals the regions and countries that are severely damaged by the COVID-19.

Suggested Citation

  • Kawata, Keisuke & Sato, Yasuhiro, 2021. "A first aid kit to assess welfare impacts," Economics Letters, Elsevier, vol. 205(C).
    • Handle: RePEc:eee:ecolet:v:205:y:2021:i:c:s0165176521002056
    DOI: 10.1016/j.econlet.2021.109928
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    References listed on IDEAS

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    1. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    2. Raj Chetty, 2009. "Sufficient Statistics for Welfare Analysis: A Bridge Between Structural and Reduced-Form Methods," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 451-488, May.
    3. Robert Shimer, 2010. "Labor Markets and Business Cycles," Economics Books, Princeton University Press, edition 1, number 9217.
    4. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    5. Randall Wright & Philipp Kircher & Benoît Julien & Veronica Guerrieri, 2021. "Directed Search and Competitive Search Equilibrium: A Guided Tour," Journal of Economic Literature, American Economic Association, vol. 59(1), pages 90-148, March.
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    More about this item

    Keywords

    Sufficient statistics; Job search models; Welfare impacts; COVID-19;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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