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The COVID-19 Conundrum in the Developing World: Protecting Lives or Protecting Jobs?

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  • Robalino, David A.

    (World Bank)

Abstract

It is almost certain that the world economy is entering a recession of historic proportions; how bad things get will depend on how governments manage the Covid-19 pandemic. At the core of the problem lies a very difficult choice: whether to "flatten the curve" of the epidemic or whether to flatten the curve of the recession. It is unlikely that both can be achieved and, in this case, it is better to address the tradeoff heads-on rather than try to ignore it or assume it doesn't exist. Because developing countries are less prepared to deal with the consequences of an economic downturn, they might not be able to afford "social distancing" policies for extended periods.

Suggested Citation

  • Robalino, David A., 2020. "The COVID-19 Conundrum in the Developing World: Protecting Lives or Protecting Jobs?," IZA Discussion Papers 13136, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13136
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    References listed on IDEAS

    as
    1. Oswald, Andrew J. & Powdthavee, Nattavudh, 2020. "The Case for Releasing the Young from Lockdown: A Briefing Paper for Policymakers," IZA Discussion Papers 13113, Institute of Labor Economics (IZA).
    2. Veronica Guerrieri & Guido Lorenzoni & Ludwig Straub & Iván Werning, 2022. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?," American Economic Review, American Economic Association, vol. 112(5), pages 1437-1474, May.
    3. Andrews, Matt & Pritchett, Lant & Woolcock, Michael, 2017. "Building State Capability: Evidence, Analysis, Action," OUP Catalogue, Oxford University Press, number 9780198747482.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic policy > Policy trade-offs
    2. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Developing economies

    Citations

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    Cited by:

    1. Olivier BARGAIN & Ulugbek AMINJONOV, 2020. "Poverty and COVID-19 in Developing Countries," Bordeaux Economics Working Papers 2020-08, Bordeaux School of Economics (BSE).
    2. Cabanillas-Jiménez, Guillermo & Galanakis, Yannis, 2022. "The varying impact of COVID-19 in the Spanish Labor Market," GLO Discussion Paper Series 1104, Global Labor Organization (GLO).
    3. Peter A.G. van Bergeijk, 2021. "Pandemic Economics," Books, Edward Elgar Publishing, number 20401.
    4. Muhammad Asali, 2021. "The New Performance Index: An application to COVID-19 era," Working Papers 003-21, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    5. Bird, Matthew D. & Arispe, Samuel & Muñoz, Paula & Freier, Luisa Feline, 2023. "Trust, social protection, and compliance: Moral hazard in Latin America during the COVID-19 pandemic," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 279-295.
    6. Bargain, Olivier B. & Aminjonov, Ulugbek, 2020. "Between a Rock and a Hard Place: Poverty and COVID-19 in Developing Countries," IZA Discussion Papers 13297, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    COVID-19; jobs; labor and development; developing countries; dynamic optimization;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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