IDEAS home Printed from https://ideas.repec.org/a/spr/jlabre/v45y2024i3d10.1007_s12122-024-09360-1.html
   My bibliography  Save this article

The Costs of Zero-Covid: Effects of Anti-contagious Policy on Labor Market Outcomes in China

Author

Listed:
  • Da Gong

    (University of California, Riverside
    State University of New York, Geneseo)

  • Andong Yan

    (University of California, Riverside)

  • Jialin Yu

    (Chinese Academy of Social Sciences)

Abstract

We investigate the effect of the anti-contagious policy on labor market outcomes in China. To measure the Zero-Covid Policy Interventions (ZPIs) implemented during 2020, we exploit the randomly emerged new cases of COVID-19 in a 14-day observation window and construct a conditionally exogenous measurement for cumulative duration of anti-contagious policy. Using a generalized difference-in-differences approach, we find that a 10% increase in the ZPIs heightened the probability of unemployment by around 0.1 percentage points. In contrast to most large economies that suffered a severe health shock from the COVID-19 pandemic, China effectively contained the scale and the spread of the initial outbreak in 2020 to the minimum level and avoided an overwhelmed and overloaded health system, which provides a unique empirical setting to examine the policy effect of anti-contagious policies. We show that the disruption in the labor market majorly results from the zero-Covid containment policy. Moreover, for employed individuals, the zero-Covid policy decreases working hours but not for the labor income, and the policy effect is heterogeneous by gender, age, education, and having a young child.

Suggested Citation

  • Da Gong & Andong Yan & Jialin Yu, 2024. "The Costs of Zero-Covid: Effects of Anti-contagious Policy on Labor Market Outcomes in China," Journal of Labor Research, Springer, vol. 45(3), pages 436-478, September.
    • Handle: RePEc:spr:jlabre:v:45:y:2024:i:3:d:10.1007_s12122-024-09360-1
    DOI: 10.1007/s12122-024-09360-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12122-024-09360-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12122-024-09360-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    2. Titan Alon & Matthias Doepke & Kristina Manysheva & Michèle Tertilt, 2022. "Gendered Impacts of COVID-19 in Developing Countries," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 272-276, May.
    3. Jaeung Sim & Daegon Cho & Youngdeok Hwang & Rahul Telang, 2022. "Frontiers: Virus Shook the Streaming Star: Estimating the COVID-19 Impact on Music Consumption," Marketing Science, INFORMS, vol. 41(1), pages 19-32, January.
    4. Hoshi, Kisho & Kasahara, Hiroyuki & Makioka, Ryo & Suzuki, Michio & Tanaka, Satoshi, 2022. "The heterogeneous effects of COVID-19 on labor markets: People’s movement and non-pharmaceutical interventions," Journal of the Japanese and International Economies, Elsevier, vol. 63(C).
    5. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    6. Goodman-Bacon, Andrew & Marcus, Jan, 2020. "Using Difference-in-Differences to Identify Causal Effects of COVID-19 Policies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(2), pages 153-158.
    7. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the COVID-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt4cc4w1hg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    8. Dang, Hai-Anh H. & Nguyen, Cuong Viet & Carletto, Calogero, 2023. "Did a successful fight against COVID-19 come at a cost? Impacts of the pandemic on employment outcomes in Vietnam," World Development, Elsevier, vol. 161(C).
    9. Shengjie Lai & Nick W. Ruktanonchai & Liangcai Zhou & Olivia Prosper & Wei Luo & Jessica R. Floyd & Amy Wesolowski & Mauricio Santillana & Chi Zhang & Xiangjun Du & Hongjie Yu & Andrew J. Tatem, 2020. "Effect of non-pharmaceutical interventions to contain COVID-19 in China," Nature, Nature, vol. 585(7825), pages 410-413, September.
    10. Jinlei Qi & Dandan Zhang & Xiang Zhang & Tanakao Takana & Yuhang Pan & Peng Yin & Jiangmei Liu & Shuocen Liu & George F. Gao & Guojun He & Maigeng Zhou, 2022. "Short- and medium-term impacts of strict anti-contagion policies on non-COVID-19 mortality in China," Nature Human Behaviour, Nature, vol. 6(1), pages 55-63, January.
    11. Larrimore, Jeff & Mortenson, Jacob & Splinter, David, 2022. "Earnings shocks and stabilization during COVID-19," Journal of Public Economics, Elsevier, vol. 206(C).
    12. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the Covid-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt9ms1v2hp, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    13. Fang, Hanming & Wang, Long & Yang, Yang, 2020. "Human mobility restrictions and the spread of the Novel Coronavirus (2019-nCoV) in China," Journal of Public Economics, Elsevier, vol. 191(C).
    14. Abel Brodeur & David Gray & Anik Islam & Suraiya Bhuiyan, 2021. "A literature review of the economics of COVID‐19," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1007-1044, September.
    15. Raj Chetty & John N Friedman & Michael Stepner & Opportunity Insights Team & Camille Baker & Harvey Barnhard & Matt Bell & Gregory Bruich & Tina Chelidze & Lucas Chu & Westley Cineus & Sebi Devlin-Fol, 2024. "The Economic Impacts of COVID-19: Evidence from a New Public Database Built Using Private Sector Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(2), pages 829-889.
    16. Dang, Hai-Anh H. & Nguyen, Cuong Viet & Carletto, Calogero, 2023. "Did a successful fight against COVID-19 come at a cost? Impacts of the pandemic on employment outcomes in Vietnam," World Development, Elsevier, vol. 161(C).
    17. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the Covid-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt7rx7t91p, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    18. Annette Alstadsæter & Bernt Bratsberg & Gaute Eielsen & Wojciech Kopczuk & Simen Markussen & Oddbjorn Raaum & Knut Røed, 2020. "The First Weeks of the Coronavirus Crisis: Who Got Hit, When and Why? Evidence from Norway," NBER Working Papers 27131, National Bureau of Economic Research, Inc.
    19. Forsythe, Eliza & Kahn, Lisa B. & Lange, Fabian & Wiczer, David, 2020. "Labor demand in the time of COVID-19: Evidence from vacancy postings and UI claims," Journal of Public Economics, Elsevier, vol. 189(C).
    20. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the Covid-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt7rx7t91p, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    21. Deng, Yongheng & Meng, Lina & Zhou, Yinggang, 2022. "The effectiveness and costs of nonpharmaceutical interventions for COVID-19 containment: A border discontinuous difference-in-difference approach," China Economic Review, Elsevier, vol. 75(C).
    22. Sumedha Gupta & Laura Montenovo & Thuy Nguyen & Felipe Lozano‐Rojas & Ian Schmutte & Kosali Simon & Bruce A. Weinberg & Coady Wing, 2023. "Effects of social distancing policy on labor market outcomes," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 166-193, January.
    23. Yun Qiu & Xi Chen & Wei Shi, 2020. "Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(4), pages 1127-1172, October.
    24. Gordon, Daniel V. & Grafton, R. Quentin & Steinshamn, Stein Ivar, 2021. "Cross-country effects and policy responses to COVID-19 in 2020: The Nordic countries," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 198-210.
    25. Nathan Nunn & Leonard Wantchekon, 2011. "The Slave Trade and the Origins of Mistrust in Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3221-3252, December.
    26. Stefania Albanesi & Jiyeon Kim, 2021. "Effects of the COVID-19 Recession on the US Labor Market: Occupation, Family, and Gender," Journal of Economic Perspectives, American Economic Association, vol. 35(3), pages 3-24, Summer.
    27. Hu, Jiayin & Wang, Xuan & Yang, Qingxu & Yi, Junjian, 2024. "Corrigendum to “Gender disparities in the labor market during COVID-19 lockdowns: Evidence from online job postings and applications in China” [Journal of Economic Behavior & Organization 223 (2024), ," Journal of Economic Behavior & Organization, Elsevier, vol. 228(C).
    28. Goolsbee, Austan & Syverson, Chad, 2021. "Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020," Journal of Public Economics, Elsevier, vol. 193(C).
    29. Solomon Hsiang & Daniel Allen & Sébastien Annan-Phan & Kendon Bell & Ian Bolliger & Trinetta Chong & Hannah Druckenmiller & Luna Yue Huang & Andrew Hultgren & Emma Krasovich & Peiley Lau & Jaecheol Le, 2020. "The effect of large-scale anti-contagion policies on the COVID-19 pandemic," Nature, Nature, vol. 584(7820), pages 262-267, August.
    30. Guojun He & Yuhang Pan & Takanao Tanaka, 2020. "The short-term impacts of COVID-19 lockdown on urban air pollution in China," Nature Sustainability, Nature, vol. 3(12), pages 1005-1011, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leonardo Fabio Morales & Leonardo Bonilla‐Mejía & Jose Pulido & Luz A. Flórez & Didier Hermida & Karen L. Pulido‐Mahecha & Francisco Lasso‐Valderrama, 2022. "Effects of the COVID‐19 pandemic on the Colombian labour market: Disentangling the effect of sector‐specific mobility restrictions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 308-357, February.
    2. Arceo-Gomez, Eva O. & Campos-Vazquez, Raymundo M. & Esquivel, Gerardo & Alcaraz, Eduardo & Martinez, Luis A. & Lopez, Norma G., 2023. "The impact of COVID-19 infection on labor outcomes of Mexican formal workers," World Development Perspectives, Elsevier, vol. 29(C).
    3. Gordon Betcherman & Nicholas Giannakopoulos & Ioannis Laliotis & Ioanna Pantelaiou & Mauro Testaverde & Giannis Tzimas, 2023. "The short-term impact of the 2020 pandemic lockdown on employment in Greece," Empirical Economics, Springer, vol. 65(3), pages 1273-1307, September.
    4. Hai-Anh H. Dang & Cuong Viet Nguyen, 2024. "Agricultural Production as a Coping Strategy during the Covid-19 Pandemic? Evidence from Rural Viet Nam," Working Papers DP-2023-23, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Daniel Graeber & Alexander S. Kritikos & Johannes Seebauer, 2021. "COVID-19: a crisis of the female self-employed," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(4), pages 1141-1187, October.
    6. Daniel Goller & Stefan C. Wolter, 2021. "“Too shocked to search” The COVID-19 shutdowns’ impact on the search for apprenticeships," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 157(1), pages 1-15, December.
    7. Humphries, John Eric & Neilson, Christopher A. & Ulyssea, Gabriel, 2020. "Information frictions and access to the Paycheck Protection Program," Journal of Public Economics, Elsevier, vol. 190(C).
    8. Corinne Dubois & Luisa Lambertini & Yu Wu, 2022. "Gender effects of the COVID-19 pandemic in the Swiss labor market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-29, December.
    9. Liang, Xiao & Rozelle, Scott & Yi, Hongmei, 2022. "The impact of COVID-19 on employment and income of vocational graduates in China: Evidence from surveys in January and July 2020," China Economic Review, Elsevier, vol. 75(C).
    10. Lea Immel & Florian Neumeier & Andreas Peichl, 2022. "The Unequal Consequences of the Covid‐19 Pandemic: Evidence from a Large Representative German Population Survey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 471-496, June.
    11. Seung Jin Cho & Jun Yeong Lee & John V. Winters, 2021. "Employment impacts of the COVID‐19 pandemic across metropolitan status and size," Growth and Change, Wiley Blackwell, vol. 52(4), pages 1958-1996, December.
    12. Nakamura, Nobuyuki & Suzuki, Aya, 2021. "COVID-19 and the intentions to migrate from developing countries: Evidence from online search activities in Southeast Asia," Journal of Asian Economics, Elsevier, vol. 76(C).
    13. Enerelt Murakami, 2022. "Immediate impacts of the COVID-19 pandemic on household economic activities and food security in Tajikistan," Economics of Disasters and Climate Change, Springer, vol. 6(2), pages 259-291, July.
    14. Cerqua, Augusto & Letta, Marco, 2022. "Local inequalities of the COVID-19 crisis," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    15. Antonio Chirumbolo & Antonino Callea & Flavio Urbini, 2022. "Living in Liquid Times: The Relationships among Job Insecurity, Life Uncertainty, and Psychosocial Well-Being," IJERPH, MDPI, vol. 19(22), pages 1-20, November.
    16. Couch, Kenneth A. & Fairlie, Robert W. & Xu, Huanan, 2020. "Early evidence of the impacts of COVID-19 on minority unemployment," Journal of Public Economics, Elsevier, vol. 192(C).
    17. Wu, Jianxin & Zhan, Xiaoling & Xu, Hui & Ma, Chunbo, 2023. "The economic impacts of COVID-19 and city lockdown: Early evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 151-165.
    18. Sumedha Gupta & Kosali I. Simon & Coady Wing, 2020. "Mandated and Voluntary Social Distancing During The COVID-19 Epidemic: A Review," NBER Working Papers 28139, National Bureau of Economic Research, Inc.
    19. Leonardo Baccini & Abel Brodeur & Stephen Weymouth, 2021. "The COVID-19 pandemic and the 2020 US presidential election," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 739-767, April.
    20. Chen, Joy & Cheng, Zijun & Gong, Robin Kaiji & Li, Jinlin, 2022. "Riding out the COVID-19 storm: How government policies affect SMEs in China," China Economic Review, Elsevier, vol. 75(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jlabre:v:45:y:2024:i:3:d:10.1007_s12122-024-09360-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.