IDEAS home Printed from https://ideas.repec.org/a/spr/jecrev/v72y2021i4d10.1007_s42973-021-00092-w.html
   My bibliography  Save this article

Trade-off between job losses and the spread of COVID-19 in Japan

Author

Listed:
  • Kisho Hoshi

    (Vancouver School of Economics, UBC)

  • Hiroyuki Kasahara

    (Vancouver School of Economics, UBC)

  • Ryo Makioka

    (Research Institute of Economy, Trade and Industry (RIETI))

  • Michio Suzuki

    (Cabinet Office and Tohoku University)

  • Satoshi Tanaka

    (University of Queensland)

Abstract

This paper quantitatively analyzes the trade-off between job losses and the spread of COVID-19 in Japan. We derive an empirical specification from the social planner’s resource constraint under the susceptible, infected, recovered, and deaths (SIRD) model and estimate how job losses and the case growth rate are related to people’s mobility using the Japanese prefecture-level panel data on confirmed cases, involuntary job losses, people’s mobility, and teleworkability. Our findings are summarized as follows. First, we find that a decrease in mobility driven by containment policies is associated with an increase in involuntary job separations, but the high teleworkability mitigates the negative effect of decreased mobility on job losses. Second, estimating how the case growth is related to people’s mobility and past cases, we find that the case growth rate is positively related to an increase in people’s mobility but negatively associated with past confirmed cases. Third, using these estimates, we provide a quantitative analysis of the trade-off between job losses and the number of confirmed cases. Taking Tokyo in July 2020 as a benchmark, we find that the cost of saving 1 job per month is 2.3 more confirmed cases per month in the short run of 1 month. When we consider a trade-off for 3 months from July to September of 2020, protecting 1 job per month requires 6.6 more confirmed cases per month. Therefore, the trade-off becomes worse substantially in the longer run of 3 months, reflecting the exponential case growth when the people’s mobility is high.

Suggested Citation

  • Kisho Hoshi & Hiroyuki Kasahara & Ryo Makioka & Michio Suzuki & Satoshi Tanaka, 2021. "Trade-off between job losses and the spread of COVID-19 in Japan," The Japanese Economic Review, Springer, vol. 72(4), pages 683-716, October.
    • Handle: RePEc:spr:jecrev:v:72:y:2021:i:4:d:10.1007_s42973-021-00092-w
    DOI: 10.1007/s42973-021-00092-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s42973-021-00092-w
    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/s42973-021-00092-w?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Simon Mongey & Laura Pilossoph & Alex Weinberg, 2020. "Which Workers Bear the Burden of Social Distancing Policies?," Working Papers 2020-51, Becker Friedman Institute for Research In Economics.
    2. Dirk Krueger & Harald Uhlig & Taojun Xie, 2022. "Macroeconomic dynamics and reallocation in an epidemic: evaluating the ‘Swedish solution’," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(110), pages 341-398.
    3. Sang Yoon (Tim) Lee & Minsung Park & Yongseok Shin, 2021. "Hit Harder, Recover Slower? Unequal Employment Effects of the COVID-19 Shock," Review, Federal Reserve Bank of St. Louis, vol. 103(4), pages 367-383, October.
    4. 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.
    5. Titan Alon & Sena Coskun & Matthias Doepke & David Koll & Michèle Tertilt, 2022. "From Mancession to Shecession: Women’s Employment in Regular and Pandemic Recessions," NBER Macroeconomics Annual, University of Chicago Press, vol. 36(1), pages 83-151.
    6. 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.
    7. 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).
    8. Stefania Albanesi & Jiyeon Kim, 2021. "The Gendered Impact of the COVID-19 Recession on the US Labor Market," NBER Working Papers 28505, National Bureau of Economic Research, Inc.
    9. Dirk Kruger & Harald Uhlig & Taojun Xie, 2020. "Macroeconomic Dynamics and Reallocation in an Epidemic," Working Papers 2020-43, Becker Friedman Institute for Research In Economics.
    10. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    11. Dingel, Jonathan I. & Neiman, Brent, 2020. "How many jobs can be done at home?," Journal of Public Economics, Elsevier, vol. 189(C).
    12. Moll, Benjamin & Kaplan, Greg & Violante, Giovanni, 2020. "The Great Lockdown and the Big Stimulus: Tracing the Pandemic Possibility Frontier for the U.S," CEPR Discussion Papers 15256, C.E.P.R. Discussion Papers.
    13. Takaku, Reo & Yokoyama, Izumi, 2021. "What the COVID-19 school closure left in its wake: Evidence from a regression discontinuity analysis in Japan," Journal of Public Economics, Elsevier, vol. 195(C).
    14. Andrew Atkeson, 2020. "What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios," NBER Working Papers 26867, National Bureau of Economic Research, Inc.
    15. Kikuchi, Shinnosuke & Kitao, Sagiri & Mikoshiba, Minamo, 2021. "Who suffers from the COVID-19 shocks? Labor market heterogeneity and welfare consequences in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 59(C).
    16. Guven, Cahit & Sotirakopoulos, Panagiotis & Ulker, Aydogan, 2020. "Short-term Labour Market Effects of COVID-19 and the Associated National Lockdown in Australia: Evidence from Longitudinal Labour Force Survey," GLO Discussion Paper Series 635, Global Labor Organization (GLO).
    17. 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).
    18. Chernozhukov, Victor & Kasahara, Hiroyuki & Schrimpf, Paul, 2021. "Causal impact of masks, policies, behavior on early covid-19 pandemic in the U.S," Journal of Econometrics, Elsevier, vol. 220(1), pages 23-62.
    19. Taiyo Fukai & Hidehiko Ichimura & Keisuke Kawata, 2021. "Describing the impacts of COVID-19 on the labor market in Japan until June 2020," The Japanese Economic Review, Springer, vol. 72(3), pages 439-470, July.
    20. Victor Chernozhukov & Hiroyuki Kasahara & Paul Schrimpf, 2021. "The association of opening K–12 schools with the spread of COVID-19 in the United States: County-level panel data analysis," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 118(42), pages 2103420118-, October.
    21. Simon Mongey & Laura Pilossoph & Alexander Weinberg, 2021. "Which workers bear the burden of social distancing?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 509-526, September.
    22. Callum Jones & Thomas Philippon & Venky Venkateswaran, 2021. "Optimal Mitigation Policies in a Pandemic: Social Distancing and Working from Home [A simple planning problem for covid-19 lockdown]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5188-5223.
    23. Laura Montenovo & Xuan Jiang & Felipe Lozano Rojas & Ian M. Schmutte & Kosali I. Simon & Bruce A. Weinberg & Coady Wing, 2020. "Determinants of Disparities in Covid-19 Job Losses," NBER Working Papers 27132, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shibamoto, Masahiko & Hayaki, Shoka & Ogisu, Yoshitaka, 2022. "COVID-19 infection spread and human mobility," Journal of the Japanese and International Economies, Elsevier, vol. 64(C).
    2. 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).
    3. Feiyu Hu & Jun Pan & Haijun Wang, 2024. "Unveiling the spatial and temporal variation of customer sentiment in hotel experiences: a case study of Beppu City, Japan," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    4. Masayuki Morikawa, 2024. "Productivity dynamics of work from home: Firm-level evidence from Japan," Journal of Evolutionary Economics, Springer, vol. 34(2), pages 465-487, April.
    5. Michihito Ando & Masato Furuichi, 2022. "The association of COVID-19 employment shocks with suicide and safety net use: An early-stage investigation," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-26, March.
    6. Tomoo INOUE & Tatsuyoshi OKIMOTO, 2022. "Exploring the Dynamic Relationship between Mobility and the Spread of COVID-19, and the Role of Vaccines," Discussion papers 22011, Research Institute of Economy, Trade and Industry (RIETI).
    7. Satoshi Tanaka, 2022. "Economic Impacts of SARS/MERS/COVID‐19 in Asian Countries," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 41-61, January.
    8. Masayuki MORIKAWA, 2022. "Productivity Dynamics of Work from Home since the Onset of the COVID-19 Pandemic: Evidence from a panel of firm surveys," Discussion papers 22061, Research Institute of Economy, Trade and Industry (RIETI).
    9. Beppu, Shotaro & Fujii, Daisuke & Kubota, Hiroyuki & Machi, Kohei & Maeda, Yuta & Nakata, Taisuke & Shibuya, Haruki, 2023. "Cross-regional heterogeneity in health and economic outcomes during the COVID-19 pandemic: An analysis of Japan," Journal of the Japanese and International Economies, Elsevier, vol. 70(C).

    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. 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).
    2. Satoshi Tanaka, 2022. "Economic Impacts of SARS/MERS/COVID‐19 in Asian Countries," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 41-61, January.
    3. Anand Chopra & Michael B. Devereux & Amartya Lahiri, 2022. "Pandemics through the lens of occupations," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 540-580, February.
    4. Marina Azzimonti-Renzo & Alessandra Fogli & Fabrizio Perri & Mark Ponder, 2020. "Pandemic Control in ECON-EPI Networks," Staff Report 609, Federal Reserve Bank of Minneapolis.
    5. Kugler, Maurice & Viollaz, Mariana & Duque, Daniel & Gaddis, Isis & Newhouse, David & Palacios-Lopez, Amparo & Weber, Michael, 2023. "How did the COVID-19 crisis affect different types of workers in the developing world?," World Development, Elsevier, vol. 170(C).
    6. Fukai, Taiyo & Ikeda, Masato & Kawaguchi, Daiji & Yamaguchi, Shintaro, 2021. "COVID-19 and the Employment Gender Gap," IZA Discussion Papers 14711, Institute of Labor Economics (IZA).
    7. David Baqaee & Emmanuel Farhi, 2020. "Nonlinear Production Networks with an Application to the Covid-19 Crisis," NBER Working Papers 27281, National Bureau of Economic Research, Inc.
    8. Alipour, Jean-Victor & Fadinger, Harald & Schymik, Jan, 2021. "My home is my castle – The benefits of working from home during a pandemic crisis," Journal of Public Economics, Elsevier, vol. 196(C).
    9. Kong, Edward & Prinz, Daniel, 2020. "Disentangling policy effects using proxy data: Which shutdown policies affected unemployment during the COVID-19 pandemic?," Journal of Public Economics, Elsevier, vol. 189(C).
    10. Masayuki Morikawa, 2022. "Work‐from‐home productivity during the COVID‐19 pandemic: Evidence from Japan," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 508-527, April.
    11. Kunal Dasgupta & Srinivasan Murali, 2024. "Pandemic containment and inequality in a developing economy," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 837-864, April.
    12. David Baqaee & Emmanuel Farhi, 2022. "Supply and Demand in Disaggregated Keynesian Economies with an Application to the COVID-19 Crisis," American Economic Review, American Economic Association, vol. 112(5), pages 1397-1436, May.
    13. Sewon Hur, 2023. "The Distributional Effects Of Covid‐19 And Optimal Mitigation Policies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 261-294, February.
    14. Kairon Shayne D. Garcia & Benjamin W. Cowan, 2022. "The Impact of U.S. School Closures on Labor Market Outcomes during the COVID-19 Pandemic," NBER Working Papers 29641, National Bureau of Economic Research, Inc.
    15. Greg Kaplan & Benjamin Moll & Giovanni L. Violante, 2020. "The Great Lockdown and the Big Stimulus: Tracing the Pandemic Possibility Frontier for the U.S," NBER Working Papers 27794, National Bureau of Economic Research, Inc.
    16. Houštecká, Anna & Koh, Dongya & Santaeulàlia-Llopis, Raül, 2021. "Contagion at work: Occupations, industries and human contact," Journal of Public Economics, Elsevier, vol. 200(C).
    17. Martin Bodenstein & Giancarlo Corsetti & Luca Guerrieri, 2022. "Social distancing and supply disruptions in a pandemic," Quantitative Economics, Econometric Society, vol. 13(2), pages 681-721, May.
    18. Fukai, Taiyo & Ikeda, Masato & Kawaguchi, Daiji & Yamaguchi, Shintaro, 2023. "COVID-19 and the employment gender gap in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 68(C).
    19. Aum, Sangmin & Lee, Sang Yoon (Tim) & Shin, Yongseok, 2021. "Inequality of fear and self-quarantine: Is there a trade-off between GDP and public health?," Journal of Public Economics, Elsevier, vol. 194(C).
    20. Teresa Barbieri & Gaetano Basso & Sergio Scicchitano, 2022. "Italian Workers at Risk During the COVID-19 Epidemic," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(1), pages 175-195, March.

    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:jecrev:v:72:y:2021:i:4:d:10.1007_s42973-021-00092-w. 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.