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COVID-19 PANDEMIC AND UNEMPLOYMENT RATE RELATIONSHIP: THE CASE OF OECD COUNTRIES

Year 2021, Volume: 12 Issue: 24, 922 - 945, 21.12.2021
https://doi.org/10.36543/kauiibfd.2021.038

Abstract

Covid-19 pandemic has caused the decrease in the production and supply chain as well as demand for good and service of countries, millions of people become unemployed, pronounced volatility in financial markets, and eventually to recession. According to the World Bank estimates, the global economic growth rate decreased by 4.5% to 6%, 95 million people were included in the extreme poverty, and according to the World Trade Organization estimates, global trade decreased by 5.3% in 2020. However, in the same year, global employment losses reached 110 million people, global labor income decreased by 8.3%, and the number of unemployed increased by 33 million people. In the OECD, while unemployment rates were 5% before the pandemic, it increased to 8% during the pandemic. In this study, the effect of the Covid-19 epidemic on unemployment rates was investigated in the example of OECD countries, using panel data methods for the period March 2020-2021. The AMG estimator revealed that unemployment rates increase as the number of deaths due to Covid-19 in OECD countries increases. On the other hand, the Dumitrescu-Hurlin causality test showed that there is a two-way relationship between the number of people who lost their lives due to Covid-19 and unemployment rates in OECD countries.

References

  • Almeida, F., & Santos, J. D. (2020). The effects of Covid-19 on job security and unemployment in Portugal. International Journal of Sociology and Social Policy, 40 (9/10), 995-1003.
  • Amendola, M., Gaffard, J. L., & Saraceno, F. (2004). Wage flexibility and unemployment: the Keynesian perspective revisited. Scottish Journal of Political Economy, 51(5), 654-674.
  • Alvarez, F. E., Argente, D., & Lippi, F., (2020), A simple planning problem for Covid-19 lockdown, NBER Working Paper 26981, https://doi.org/10.3386/w26981.
  • Asare, P., & Barfi, R. (2021). The impact of Covid-19 pandemic on the Global economy: emphasis on poverty alleviation and economic growth. Economics, 8(1), 32-43.
  • Bauer, A. & Weber, E. (2020), Covid-19: how much unemployment was caused by the shutdown in Germany?, Applied Economics Letters, 28(12), 1053-1058.
  • Bernstein, J., (2020), Covid-19: a view from the labor market, 15 Haziran 2021 tarihinde http://alexrichterecon.com/AWR_files/BRT-covid19.pdf adresinden erişildi.
  • Bussolo, M., Kotia, A., & Sharma, S., (2021), Panel data evidence on the Covid-19 labor market crisis in India, Policy Research Working Paper, 9584.
  • Bersvendsen, T., & Ditzen, J. (2020), xthst: testing slope homogeneity in Stata, 2020 London (online) Stata User Group Meeting, 02 Haziran 2021 tarihinde https://www.stata.com/meeting/uk20/slides/UK20_Ditzen.pdf adresinden erişildi.
  • Congressional Research Service (2021), Global economic effects of Covid-19, 29 Haziran 2021 tarihinde https://fas.org/sgp/crs/row/R46270.pdf adresinden erişildi.
  • Dumitrescu, E.-I., & Hurlin, C., (2011), Testing for Granger non-causality in heterogeneous panels, 10 Mayıs 2021 tarihinde https://www.univ-orleans.fr/deg/masters/ESA/CH/Causality_20111.pdf adresinden erişildi.
  • Eberhardt, M., & Bond, S., (2009). Cross-section dependence in nonstationary panel models: a novel estimator. MPRA Paper No. 17692.
  • Emmerling, J., Furceri, D., Monteiro, F. L., Loungani, P., Ostry, J. D., Pizzuto, P., & Tavoni, M. (2021). Will the economic impact of COVID-19 persist? Prognosis from 21st century pandemics. IMF Working Papers, Wp/21/119.
  • Fornaro, L. & Wolf, D., (2020), Covid-19 Coronavirus and Macroeconomic Policy,” Barcelona Graduate School of Economics Working Paper 1169.
  • Fotis, P., & Polemis, M. (2018). The impact of market deregulation on milk price: A dynamic panel data approach. MPRA Paper No. 86542.
  • Georgiou, M., N. (2021), Covid 19 on unemployment rate, 29 Haziran 2021 tarihinde https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3801700 adresinden erişildi.
  • Gros, D., & Ounnas, A. (2021). Labour market responses to the Covid-19 crisis in the United States and Europe. CEPS working document, No: 2021/01, April.
  • Heffetz, O., & Reeves, D. (2021). Measuring unemployment in crisis: effects of Covid-19 on potential biases in the CPS (No. w28310). National Bureau of Economic Research.
  • Hernández, M. A. (2015). Estimating capital flows to emerging market economies with heterogeneous panels (No. 2015-03). Working Papers.
  • Hossain, S., & Rahaman, M. (2021). The post Covid-19 global economy: an econometric analysis. J. Econ. Financ, 12, 22-43.
  • ILO (2021). ILO Monitor: Covid-19 and the world of work. Seventh edition Updated estimates and analysis. 20 Haziran 2021 tarihinde https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_767028.pdf adresinden erişildi.
  • Kalenkoski, C. M., & Pabilonia, S. W. (2020). Initial impact of the COVID-19 pandemic on the employment and hours of self-employed coupled and single workers by gender and parental status. Discussion Paper Series, IZA DP No. 13443.
  • Kong, E., & Prinz, D. (2020). Disentangling policy effects using proxy data: Which shutdown policies affected unemployment during the COVID-19 pandemic?. Journal of Public Economics, 189, 104257.
  • Lanzafame, M. (2013). Crime and regional growth in Italy. 22 Mayıs 2021 tarihinde https://www.aisre.it/images/old_papers/Lanzafame%20_AISRe13.pdf adresinden erişildi.
  • Lee, S., Y., T., Park, M., & Shin, Y. (2021). Hit harder, recover slower? Unequal employment effects of the Covid-19 shock (No. w28354). National Bureau of Economic Research.
  • Le, H. P. (2020). The energy-growth nexus revisited: the role of financial development, institutions, government expenditure and trade openness. Heliyon, 6(7), e04369.
  • Maliszewska, M., Mattoo, A., Van Der Mensbrugghe, D., (2020). The potential impact of Covid-19 on GDP and trade: A preliminary assessment. World Bank Research Working Paper (9211).
  • Morgan, A. K., Awafo, B. A., & Quartey, T. (2021). The effects of COVID-19 on global economic output and sustainability: evidence from around the world and lessons for redress. Sustainability: Science, Practice and Policy, 17(1), 77-81.
  • OECD (2021a), OECD Statistics, 10 Mayıs 2021 tarihinde https://stats.oecd.org/ adresinden erişildi.
  • OECD (2021b), Statistics and Data Directorate, Labour statistics, 15 Mayıs 2021 tarihinde https://www.oecd.org/sdd/labour-stats/unemployment-rates-oecd-update-june-2021.htm adresinden erişildi.
  • Ourworldindata (2021), Coronavirus Source Data11 Mayıs 2021 tarihinde https://ourworldindata.org/coronavirus-source-data adresinden erişildi.
  • Ouattara, B., & Zhang, Y. F. (2019). Infrastructure and long-run economic growth: evidence from Chinese provinces. Empirical Economics, 57(1), 263-284.
  • Padhan, R., & Prabheesh, K. P. (2021). The economics of Covid-19 pandemic: A survey. Economic Analysis and Policy, 70, 220-237.
  • Pena-Sanchez, R. (2020), Covid-19: 2020 Global unemployment by economic sector, The Journal of International Management Studies, 15(1), 36-44.
  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.
  • Pesaran, M. H., (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
  • Pesaran, H. M., ve Yamagata, T. (2008). Testing slope homogeneity in large panels, Journal of Econometrics, 142, 50-93.
  • Rauf, A., Liu, X., Amin, W., Ozturk, I., Rehman, O. U., & Hafeez, M. (2018). Testing EKC hypothesis with energy and sustainable development challenges: a fresh evidence from belt and road initiative economies. Environmental Science and Pollution Research, 25(32), 32066-32080.
  • Schotte, S., Danquah, M., Osei, R. D., & Sen, K. (2021). The labour market impact of COVID-19 lockdowns: Evidence from Ghana (No. wp-2021-27). World Institute for Development Economic Research (UNU-WIDER).
  • Yilmazkuday, H. (2020). Unequal Unemployment Effects of Covid-19 and Monetary Policy across US States. Journal of Behavioral Economics for Policy, Vol. 4, COVID-19 Special Issue 3, 45-53.
  • Women, U. N. (2020). The economic and social impact of Covid-19 on women and men: Rapid Gender Assessment of Covid-19 implications in Turkey.
  • Worldmeters (2021), Covid-19 Coronavirus Pandemic, 25 Haziran 2021 tarihinde https://www.worldometers.info/coronavirus/ adresinden erişildi.

COVİD-19 SALGINI VE İŞSİZLİK ORANLARI İLİŞKİSİ: OECD ÜLKELERİ ÖRNEĞİ

Year 2021, Volume: 12 Issue: 24, 922 - 945, 21.12.2021
https://doi.org/10.36543/kauiibfd.2021.038

Abstract

Covid-19 salgını, ülkelerin üretim ve tedarik zincirlerinin sekteye uğramasına, mal ve hizmet talebinin önemli ölçüde düşmesine ve milyonlarca insanın işsiz kalmasına, finansal piyasalarda oynaklıklara, neticede ülkelerin resesyona girmesine neden olmuştur. Dünya Bankası tahminlerine göre 2020 yılında küresel ekonomik büyüme oranı %4.5 ila %6 kadar azalmış, 95 milyon kişi aşırı yoksul sınıfına dâhil olmuş, Dünya Ticaret Örgütü tahminlerine göre ise küresel ticaret %5.3 oranında düşmüştür. Bununla birlikte aynı yılda, küresel istihdam kayıpları 110 milyon kişiye ulaşmış, küresel emek geliri %8.3 oranında düşmüş, işsiz sayısı 33 milyon kişi artmıştır. OECD genelinde işsizlik oranları salgın öncesinde %5 düzeylerinde iken, salgın sürecinde %8 seviyelerine kadar çıkmıştır. Bu çalışmada, OECD ülkeleri kapsamında, Covid-19 salgınının işsizlik oranları üzerindeki etkisi 2020 Mart-2021 Mart dönemi için panel veri yöntemleri kullanılarak araştırılmıştır. AMG tahmincisi bulgularına göre OECD ülkelerinde Covid-19 nedeniyle hayatını kaybedenlerin sayısı arttıkça işsizlik oranları artmaktadır. Dumitrescu-Hurlin nedensellik testi bulgularına göre OECD ülkelerinde Covid-19 nedeniyle hayatını kaybedenlerin sayısı ile işsizlik oranları arasında iki yönlü bir ilişki vardır.

References

  • Almeida, F., & Santos, J. D. (2020). The effects of Covid-19 on job security and unemployment in Portugal. International Journal of Sociology and Social Policy, 40 (9/10), 995-1003.
  • Amendola, M., Gaffard, J. L., & Saraceno, F. (2004). Wage flexibility and unemployment: the Keynesian perspective revisited. Scottish Journal of Political Economy, 51(5), 654-674.
  • Alvarez, F. E., Argente, D., & Lippi, F., (2020), A simple planning problem for Covid-19 lockdown, NBER Working Paper 26981, https://doi.org/10.3386/w26981.
  • Asare, P., & Barfi, R. (2021). The impact of Covid-19 pandemic on the Global economy: emphasis on poverty alleviation and economic growth. Economics, 8(1), 32-43.
  • Bauer, A. & Weber, E. (2020), Covid-19: how much unemployment was caused by the shutdown in Germany?, Applied Economics Letters, 28(12), 1053-1058.
  • Bernstein, J., (2020), Covid-19: a view from the labor market, 15 Haziran 2021 tarihinde http://alexrichterecon.com/AWR_files/BRT-covid19.pdf adresinden erişildi.
  • Bussolo, M., Kotia, A., & Sharma, S., (2021), Panel data evidence on the Covid-19 labor market crisis in India, Policy Research Working Paper, 9584.
  • Bersvendsen, T., & Ditzen, J. (2020), xthst: testing slope homogeneity in Stata, 2020 London (online) Stata User Group Meeting, 02 Haziran 2021 tarihinde https://www.stata.com/meeting/uk20/slides/UK20_Ditzen.pdf adresinden erişildi.
  • Congressional Research Service (2021), Global economic effects of Covid-19, 29 Haziran 2021 tarihinde https://fas.org/sgp/crs/row/R46270.pdf adresinden erişildi.
  • Dumitrescu, E.-I., & Hurlin, C., (2011), Testing for Granger non-causality in heterogeneous panels, 10 Mayıs 2021 tarihinde https://www.univ-orleans.fr/deg/masters/ESA/CH/Causality_20111.pdf adresinden erişildi.
  • Eberhardt, M., & Bond, S., (2009). Cross-section dependence in nonstationary panel models: a novel estimator. MPRA Paper No. 17692.
  • Emmerling, J., Furceri, D., Monteiro, F. L., Loungani, P., Ostry, J. D., Pizzuto, P., & Tavoni, M. (2021). Will the economic impact of COVID-19 persist? Prognosis from 21st century pandemics. IMF Working Papers, Wp/21/119.
  • Fornaro, L. & Wolf, D., (2020), Covid-19 Coronavirus and Macroeconomic Policy,” Barcelona Graduate School of Economics Working Paper 1169.
  • Fotis, P., & Polemis, M. (2018). The impact of market deregulation on milk price: A dynamic panel data approach. MPRA Paper No. 86542.
  • Georgiou, M., N. (2021), Covid 19 on unemployment rate, 29 Haziran 2021 tarihinde https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3801700 adresinden erişildi.
  • Gros, D., & Ounnas, A. (2021). Labour market responses to the Covid-19 crisis in the United States and Europe. CEPS working document, No: 2021/01, April.
  • Heffetz, O., & Reeves, D. (2021). Measuring unemployment in crisis: effects of Covid-19 on potential biases in the CPS (No. w28310). National Bureau of Economic Research.
  • Hernández, M. A. (2015). Estimating capital flows to emerging market economies with heterogeneous panels (No. 2015-03). Working Papers.
  • Hossain, S., & Rahaman, M. (2021). The post Covid-19 global economy: an econometric analysis. J. Econ. Financ, 12, 22-43.
  • ILO (2021). ILO Monitor: Covid-19 and the world of work. Seventh edition Updated estimates and analysis. 20 Haziran 2021 tarihinde https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_767028.pdf adresinden erişildi.
  • Kalenkoski, C. M., & Pabilonia, S. W. (2020). Initial impact of the COVID-19 pandemic on the employment and hours of self-employed coupled and single workers by gender and parental status. Discussion Paper Series, IZA DP No. 13443.
  • Kong, E., & Prinz, D. (2020). Disentangling policy effects using proxy data: Which shutdown policies affected unemployment during the COVID-19 pandemic?. Journal of Public Economics, 189, 104257.
  • Lanzafame, M. (2013). Crime and regional growth in Italy. 22 Mayıs 2021 tarihinde https://www.aisre.it/images/old_papers/Lanzafame%20_AISRe13.pdf adresinden erişildi.
  • Lee, S., Y., T., Park, M., & Shin, Y. (2021). Hit harder, recover slower? Unequal employment effects of the Covid-19 shock (No. w28354). National Bureau of Economic Research.
  • Le, H. P. (2020). The energy-growth nexus revisited: the role of financial development, institutions, government expenditure and trade openness. Heliyon, 6(7), e04369.
  • Maliszewska, M., Mattoo, A., Van Der Mensbrugghe, D., (2020). The potential impact of Covid-19 on GDP and trade: A preliminary assessment. World Bank Research Working Paper (9211).
  • Morgan, A. K., Awafo, B. A., & Quartey, T. (2021). The effects of COVID-19 on global economic output and sustainability: evidence from around the world and lessons for redress. Sustainability: Science, Practice and Policy, 17(1), 77-81.
  • OECD (2021a), OECD Statistics, 10 Mayıs 2021 tarihinde https://stats.oecd.org/ adresinden erişildi.
  • OECD (2021b), Statistics and Data Directorate, Labour statistics, 15 Mayıs 2021 tarihinde https://www.oecd.org/sdd/labour-stats/unemployment-rates-oecd-update-june-2021.htm adresinden erişildi.
  • Ourworldindata (2021), Coronavirus Source Data11 Mayıs 2021 tarihinde https://ourworldindata.org/coronavirus-source-data adresinden erişildi.
  • Ouattara, B., & Zhang, Y. F. (2019). Infrastructure and long-run economic growth: evidence from Chinese provinces. Empirical Economics, 57(1), 263-284.
  • Padhan, R., & Prabheesh, K. P. (2021). The economics of Covid-19 pandemic: A survey. Economic Analysis and Policy, 70, 220-237.
  • Pena-Sanchez, R. (2020), Covid-19: 2020 Global unemployment by economic sector, The Journal of International Management Studies, 15(1), 36-44.
  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of econometrics, 68(1), 79-113.
  • Pesaran, M. H., (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
  • Pesaran, H. M., ve Yamagata, T. (2008). Testing slope homogeneity in large panels, Journal of Econometrics, 142, 50-93.
  • Rauf, A., Liu, X., Amin, W., Ozturk, I., Rehman, O. U., & Hafeez, M. (2018). Testing EKC hypothesis with energy and sustainable development challenges: a fresh evidence from belt and road initiative economies. Environmental Science and Pollution Research, 25(32), 32066-32080.
  • Schotte, S., Danquah, M., Osei, R. D., & Sen, K. (2021). The labour market impact of COVID-19 lockdowns: Evidence from Ghana (No. wp-2021-27). World Institute for Development Economic Research (UNU-WIDER).
  • Yilmazkuday, H. (2020). Unequal Unemployment Effects of Covid-19 and Monetary Policy across US States. Journal of Behavioral Economics for Policy, Vol. 4, COVID-19 Special Issue 3, 45-53.
  • Women, U. N. (2020). The economic and social impact of Covid-19 on women and men: Rapid Gender Assessment of Covid-19 implications in Turkey.
  • Worldmeters (2021), Covid-19 Coronavirus Pandemic, 25 Haziran 2021 tarihinde https://www.worldometers.info/coronavirus/ adresinden erişildi.
There are 41 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

Efe Can Kılınç 0000-0002-3139-0684

Publication Date December 21, 2021
Acceptance Date November 26, 2021
Published in Issue Year 2021 Volume: 12 Issue: 24

Cite

APA Kılınç, E. C. (2021). COVİD-19 SALGINI VE İŞSİZLİK ORANLARI İLİŞKİSİ: OECD ÜLKELERİ ÖRNEĞİ. Kafkas Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 12(24), 922-945. https://doi.org/10.36543/kauiibfd.2021.038

KAUJEASF is the corporate journal of Kafkas University, Faculty of Economics and Administrative Sciences Journal Publishing.

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