The Effects of Income Support Policy on Covid-19 Related Mortality: A Cross-Country Study

Abstract

The COVID-19 pandemic presented an immense global challenge, necessitating a delicate balance between preserving public health and sustaining economic and social equilibrium. This study employs econometric methods to investigate the influence of income support measures on COVID-19 mortality rates across 186 countries, spanning from January 1, 2020, to the onset of widespread vaccination campaigns, December 14, 2020. Employing the Least Absolute Shrinkage and Selection Operator (LASSO) for variable selection and the Augmented Mean Group estimator (AMG) for data analysis, the study discovers a significant reduction in COVID-19 mortality linked to income support. This effect primarily stems from alleviating poverty-related vulnerabilities and enhancing adherence to public health guidelines. Emphasizing the pivotal role of unconditional cash transfers during crises, the research underscores the varying efficacy of income support over time, with the most pronounced impact observed shortly after implementation. Nonetheless, it issues a cautionary note, particularly for developing nations, urging against an exclusive reliance on financial aid without addressing other determinants influencing adherence to health protocols, which could potentially curtail policy effectiveness. Advocating for a comprehensive approach, the study stresses the integration of financial assistance with broader strategies aimed at mitigating mortality during natural disasters.

Keywords

• covid-19
• income support
• infection rate
• mortality rate
• lasso
• panel data