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The Impact of COVID-19 on the Household Economy of India

Author

Listed:
  • Bino Paul

    (Tata Institute of Social Sciences)

  • Unmesh Patnaik

    (Tata Institute of Social Sciences)

  • Kamal Kumar Murari

    (Tata Institute of Social Sciences)

  • Santosh Kumar Sahu

    (Indian Institute of Technology Madras)

  • T. Muralidharan

    (TMI Group)

Abstract

COVID-19 has disrupted the Indian economy. Government-enforced lockdown to restrict the spread of infection has impacted the household economy in particular. We combine aggregates from national income accounts and estimates from the microdata of a labour force survey covering more than 0.1 million households and 0.4 million individuals. The aggregate daily loss to households is USD 2.42 billion. While loss to earnings accounts for 72% of the total, the rest 28% is wage loss. Service-based activities account for two thirds of wage loss, and natural resource-based activities are responsible for most of the earning loss. The dominance of informal job contracts and job switching in labour markets intensifies this, with the most vulnerable group consisting of 57.8 million in casual engagement, who have a high degree of transition from one stream of employment to another on a daily basis.

Suggested Citation

  • Bino Paul & Unmesh Patnaik & Kamal Kumar Murari & Santosh Kumar Sahu & T. Muralidharan, 2021. "The Impact of COVID-19 on the Household Economy of India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(4), pages 867-882, December.
    • Handle: RePEc:spr:ijlaec:v:64:y:2021:i:4:d:10.1007_s41027-021-00352-8
    DOI: 10.1007/s41027-021-00352-8
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    References listed on IDEAS

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    1. Scott R Baker & Robert A Farrokhnia & Steffen Meyer & Michaela Pagel & Constantine Yannelis & Jeffrey Pontiff, 0. "How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 834-862.
    2. Morduch, Jonathan, 1994. "Poverty and Vulnerability," American Economic Review, American Economic Association, vol. 84(2), pages 221-225, May.
    3. Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-672, June.
    4. Mehrotra, Santosh & Parida, Jajati K., 2017. "Why is the Labour Force Participation of Women Declining in India?," World Development, Elsevier, vol. 98(C), pages 360-380.
    5. Chen, Martha Alter. & Jhabvala, Renana. & Lund, F. J., 2002. "Supporting workers in the informal economy : a policy framework," ILO Working Papers 993541733402676, International Labour Organization.
    6. G.D Bino Paul & Muralidharan T, 2020. "Is India Creating Adequate Jobs Post 2000: Treading Through Employment Elasticity," Working Papers id:13093, eSocialSciences.
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    1. Chatterjee, Oindrila & Gopalakrishnan, Balagopal & Mohapatra, Sanket, 2024. "Gold in household portfolios during a pandemic: Evidence from India," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1288-1306.
    2. Oindrila Chatterjee & Balagopal Gopalakrishnan & Sanket Mohapatra, 2023. "Gold in household portfolios during a pandemic: Evidence from an emerging economy," IIMA Working Papers WP 2023-06-01, Indian Institute of Management Ahmedabad, Research and Publication Department.

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