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The Economic Impacts of COVID-19: Evidence from a New Public Database Built Using Private Sector Data

2023; Oxford University Press; Volume: 139; Issue: 2 Linguagem: Inglês

10.1093/qje/qjad048

1531-4650

Raj Chetty, John N. Friedman, Michael Stepner, Hamidah Alatas, Camille Baker, Harvey Barnhard, Matthew R. Bell, Gregory Alan Bruich, Tina Chelidze, LK Chu, Westley Cineus, Sebi Devlin-Foltz, Michael Droste, Dhruv Gaur, Federico Zertuche González, Rachel Gray, Abigail Hiller, Matthew Jacob, Tyler Jacobson, Margaret Kallus, Fiona Kastel, Laura Kincaide, Caitlin Kupsc, Sarah LaBauve, Lucía Martínez Lamas, Maria Giulia Marino, Kai Matheson, Jared Miller, Christopher G. Mott, Kate Musen, Danny Onorato, Seymour Oppenheimer, Tilmann Ott, Lynn Overmann, Max Pienkny, J.B. Prince, Sebastian Puerta, Daniel A. Reuter, Peter Ruhm, Tom Rutter, Emanuel Schertz, Shannon Felton Spence, Krista Stapleford, Kamelia Stavreva, Carly Steyn, James Stratton, Clare Suter, Elizabeth Thach, Nicolaj Thor, Amanda Wahlers, K. G. Watkins, A.K. Williams, David Williams, Charlotte Williamson, Sanaa A. Yassin, Ruby Zhang, Aiyun Zheng,

Psychological Well-being and Life Satisfaction

Abstract We build a publicly available database that tracks economic activity in the United States at a granular level in real time using anonymized data from private companies. We report weekly statistics on consumer spending, business revenues, job postings, and employment rates disaggregated by county, sector, and income group. Using the publicly available data, we show how the COVID-19 pandemic affected the economy by analyzing heterogeneity in its effects across subgroups. High-income individuals reduced spending sharply in March 2020, particularly in sectors that require in-person interaction. This reduction in spending greatly reduced the revenues of small businesses in affluent, dense areas. Those businesses laid off many of their employees, leading to widespread job losses, especially among low-wage workers in such areas. High-wage workers experienced a V-shaped recession that lasted a few weeks, whereas low-wage workers experienced much larger, more persistent job losses. Even though consumer spending and job postings had recovered fully by December 2021, employment rates in low-wage jobs remained depressed in areas that were initially hard hit, indicating that the temporary fall in labor demand led to a persistent reduction in labor supply. Building on this diagnostic analysis, we evaluate the effects of fiscal stimulus policies designed to stem the downward spiral in economic activity. Cash stimulus payments led to sharp increases in spending early in the pandemic, but much smaller responses later in the pandemic, especially for high-income households. Real-time estimates of marginal propensities to consume provided better forecasts of the impacts of subsequent rounds of stimulus payments than historical estimates. Overall, our findings suggest that fiscal policies can stem secondary declines in consumer spending and job losses, but cannot restore full employment when the initial shock to consumer spending arises from health concerns. More broadly, our analysis demonstrates how public statistics constructed from private sector data can support many research and real-time policy analyses, providing a new tool for empirical macroeconomics.