Publication: Lives versus Livelihoods during the COVID-19 Pandemic: How Testing Softens the Trade-off
Loading...
Date
2021-06
ISSN
Published
2021-06
Author(s)
Editor(s)
Abstract
The early COVID-19 pandemic literature focused on the conflict between lives and livelihoods. But cross-country evidence reveals that across countries high mortality rates were often associated with large gross domestic product contractions. This paper shows that the presumed trade-off was associated with lockdowns as the primary instrument of containment. Early transition from lockdowns to testing-tracing-isolation-based containment softened the trade-off within countries and explains the absence of a trade-off across countries. The analysis finds that testing had positive indirect effects on growth and perhaps even positive direct effects. By allowing countries to relax shutdowns without compromising on containment, testing could have indirectly contributed to about a 0.6 percentage point boost in growth. By infusing greater confidence in people to step out and engage in economic activity, testing could have added another 0.6 percentage point to growth. As the world struggles to scale up vaccination in the face of new waves and variants, continued emphasis on testing could help limit infection without recourse to costly lockdowns.
Link to Data Set
Citation
“Islamaj, Ergys; Le, Duong Trung; Mattoo, Aaditya. 2021. Lives versus Livelihoods during the COVID-19 Pandemic: How Testing Softens the Trade-off. Policy Research Working Paper;No. 9696. © World Bank. http://hdl.handle.net/10986/35766 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication Geopolitical Fragmentation and Friendshoring(Washington, DC: World Bank, 2025-06-26)This paper examines the relationship between geopolitical fragmentation and friendshoring of foreign investments over time, countries, and sectors. The analysis uses comprehensive data on foreign direct investments covering greenfield projects, mergers and acquisitions, and stocks of affiliates, as well as data on four alternative measures of geopolitical distance between countries. The gravity estimations suggest that, first, geopolitical differences have a negative effect on foreign investments and the magnitude has heightened in the post-pandemic period compared to a decade ago. Second, it is primarily the companies from advanced Western economies whose foreign investment decisions are increasingly shaped by friendshoring forces. Finally, the paper shows that friendshoring is not only confined to strategic industries, implying that allocations of foreign direct investments may not solely reflect national security or resilience considerations.Publication Soaring Food Prices Threaten Recent Economic Gains in the EU(Washington, DC: World Bank, 2025-07-02)The surge in food prices following the 2021 economic rebound has become a significant concern for households, particularly low-income ones, in Bulgaria, Croatia, Poland, and Romania. Food price inflation, which surpasses general inflation rates, risks worsening poverty and food insecurity in these countries. This paper explores the distributional impacts of rising food prices and the effectiveness of government response measures. Low-income households, who allocate a larger share of their income to food, are disproportionately affected and are struggling to cope with unexpected expenses, leading to increased difficulties in accessing proper nutrition. Simulations indicate that rising food prices contribute to higher poverty rates and greater income inequality, especially among vulnerable populations. They also suggest that the main poverty-targeted social assistance schemes offer critical support for the extreme poor, but expanding both coverage and benefits is vital to shield all at-risk individuals. Targeted policies that balance immediate relief with long-term resilience-building are essential to addressing the challenges posed by escalating food prices.Publication Disentangling the Key Economic Channels through Which Infrastructure Affects Jobs(Washington, DC: World Bank, 2025-04-03)This paper takes stock of the literature on infrastructure and jobs published since the early 2000s, using a conceptual framework to identify the key channels through which different types of infrastructure impact jobs. Where relevant, it highlights the different approaches and findings in the cases of energy, digital, and transport infrastructure. Overall, the literature review provides strong evidence of infrastructure’s positive impact on employment, particularly for women. In the case of electricity, this impact arises from freeing time that would otherwise be spent on household tasks. Similarly, digital infrastructure, particularly mobile phone coverage, has demonstrated positive labor market effects, often driven by private sector investments rather than large public expenditures, which are typically required for other large-scale infrastructure projects. The evidence on structural transformation is also positive, with some notable exceptions, such as studies that find no significant impact on structural transformation in rural India in the cases of electricity and roads. Even with better market connections, remote areas may continue to lack economic opportunities, due to the absence of agglomeration economies and complementary inputs such as human capital. Accordingly, reducing transport costs alone may not be sufficient to drive economic transformation in rural areas. The spatial dimension of transformation is particularly relevant for transport, both internationally—by enhancing trade integration—and within countries, where economic development tends to drive firms and jobs toward urban centers, benefitting from economies scale and network effects. Turning to organizational transformation, evidence on skill bias in developing countries is more mixed than in developed countries and may vary considerably by context. Further research, especially on the possible reasons explaining the differences between developed and developing economies, is needed.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Managing Long COVID in East Asia and the Pacific(World Bank, Malaysia, 2021-10-07)The highly contagious Delta variant is fueling new outbreaks in East Asia and the Pacific (EAP). It is becoming evident that COVID-19 (coronavirus) is not leaving any time soon and may be here to stay. Countries with high vaccination coverage show, however, that transition to a relativelybenign phase of "managed endemicity" may be possible. At current trends, and given vaccine availability, many EAP countries are expected to vaccinate more than 60 percent of their populations by the first half of next year. Achieving and sustaining high coverage will require improving distribution capacity, overcoming vaccine hesitancy, and expanding regional production of vaccines to ensure reliable supplies for persistent COVID-19. Countries will also need to sustain the process of testing, tracing, and isolation, as well as precautions such as social distancing and wearing masks. Finally, countries need to strengthen their health systems to cope with long COVID.Publication The Spread of COVID-19 and Policy Responses(World Bank, Washington, DC, 2021-01-07)Since early 2020, the COVID-19 (coronavirus) pandemic has spread to most countries and territories around the world. For many countries, the second wave of infections is turning out to be more serious than the first. Notwithstanding the global spread of the virus, public policy responses have varied across countries and regions. This brief analyzes the spread of COVID-19 and the effectiveness of policy efforts to contain the disease across a large number of countries. The findings suggest that public health measures - especially testing - and economic support policies are associated with effective containment of the disease, and thus are supporting fundamental prerequisites for a resumption of normalcy. This brief examines the evolution of COVID-19 and public policy responses across country groups around the world; presents an econometric analysis of the relationship between the spread of infections and the policy responses; and concludes with main policy implications.Publication The Road Not Taken?(World Bank, Washington, DC, 2022-11-17)Several countries in East Asia have increased fossil fuel subsidies to keep consumer prices lower than currently high international prices. These subsidies are discouraging the shift in consumption away from fossil fuels, while high prices are encouraging investment in new fossil fuel infrastructure. Providing income transfers instead of price subsidies would encourage consumption of cleaner alternatives, while softening the welfare loss. And subsidizing investment in renewables would avert the risk of being locked in to fossil fuels. The total cost need not be higher than that of fossil fuel subsidies.Publication Demand and Supply Dynamics in East Asia During the COVID-19 Recession(World Bank, Malaysia, 2021-05-24)The COVID-19 (coronavirus) pandemic has devastated lives and damaged economies, requiring strong and decisive policy responses from governments. Developing the optimal short-term and long-term policy response to the pandemic requires understanding the demand and supply factors that drive economic growth. The appropriate policy response will depend on the size and duration of demand and supply shocks. This Research & Policy Brief provides a decomposition of demand and supply dynamics at the macroeconomic level for the large developing economies of East Asia. The findings suggest that both demand and supply shocks were important drivers of output fluctuations during the first year of the pandemic. The demand shocks created an environment of deficient demand - reflected in large negative output gaps even after the unprecedented policy response - which is expected to last through 2021. The extant deficient demand is suggestive of continued need to support the economic recovery. Its size should guide policy makers in calibrating responses to ensure that recovery is entrenched, and that short-term supply disruptions do not lead to long-term declines in potential growth.Publication Embedding Digital Finance in e-Commerce Platforms during the COVID-19 Pandemic(World Bank, Washington, DC, 2020-12)This study provides an early assessment of the impact of Coronavirus (COVID-19) on e-commerce platforms and digital financial services, identifying the opportunities, good practices, and key challenges that have emerged in different regions. The focus of the study is to evaluate the impact of Coronavirus (COVID-19) on the use of e-commerce platforms across different regions and the role that digital financial services have played in the process. The emphasis is on digital and financial inclusion of consumers and small businesses and their impact on job creation and economic growth.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2017(Washington, DC: World Bank, 2017-01-30)Why are carefully designed, sensible policies too often not adopted or implemented? When they are, why do they often fail to generate development outcomes such as security, growth, and equity? And why do some bad policies endure? This book addresses these fundamental questions, which are at the heart of development. Policy making and policy implementation do not occur in a vacuum. Rather, they take place in complex political and social settings, in which individuals and groups with unequal power interact within changing rules as they pursue conflicting interests. The process of these interactions is what this Report calls governance, and the space in which these interactions take place, the policy arena. The capacity of actors to commit and their willingness to cooperate and coordinate to achieve socially desirable goals are what matter for effectiveness. However, who bargains, who is excluded, and what barriers block entry to the policy arena determine the selection and implementation of policies and, consequently, their impact on development outcomes. Exclusion, capture, and clientelism are manifestations of power asymmetries that lead to failures to achieve security, growth, and equity. The distribution of power in society is partly determined by history. Yet, there is room for positive change. This Report reveals that governance can mitigate, even overcome, power asymmetries to bring about more effective policy interventions that achieve sustainable improvements in security, growth, and equity. This happens by shifting the incentives of those with power, reshaping their preferences in favor of good outcomes, and taking into account the interests of previously excluded participants. These changes can come about through bargains among elites and greater citizen engagement, as well as by international actors supporting rules that strengthen coalitions for reform.Publication Africa's Future, Africa's Challenge : Early Childhood Care and Development in Sub-Saharan Africa(Washington, DC : World Bank, 2008)This book seeks to achieve a balance, describing challenges that are being faced as well as developments that are underway. It seeks a balance in terms of the voices heard, including not just voices of the North commenting on the South, but voices from the South, and in concert with the North. It seeks to provide the voices of specialists and generalists, of those from international and local organizations, from academia and the field. It seeks a diversity of views and values. Such diversity and complexity are the reality of Sub-Saharan Africa (SSA) today. The major focus of this book is on SSA from the Sahel south. Approximately 130 million children between birth and age 6 live in SSA. Every year 27 million children are born, and every year 4.7 million children under age 5 die. Rates of birth and of child deaths are consistently higher in SSA than in any other part of the world; the under-5 mortality rate of 163 per 1,000 is twice that of the rest of the developing world and 30 times that of industrialized countries (UNICEF 2006). Of the children who are born, 65 percent will experience poverty, 14 million will be orphans affected by HIV/AIDS directly and within their families and one-third will experience exclusion because of their gender or ethnicity.Publication World Development Report 1984(New York: Oxford University Press, 1984)Long-term needs and sustained effort are underlying themes in this year's report. As with most of its predecessors, it is divided into two parts. The first looks at economic performance, past and prospective. The second part is this year devoted to population - the causes and consequences of rapid population growth, its link to development, why it has slowed down in some developing countries. The two parts mirror each other: economic policy and performance in the next decade will matter for population growth in the developing countries for several decades beyond. Population policy and change in the rest of this century will set the terms for the whole of development strategy in the next. In both cases, policy changes will not yield immediate benefits, but delay will reduce the room for maneuver that policy makers will have in years to come.Publication Tanzania(World Bank, Washington, DC, 2015-06)This study aims to achieve a better understanding of the agricultural risk and risk management situation in Tanzania with a view to identifying key solutions to reduce current gross domestic product (GDP) growth volatility. For the purpose of this assessment, risk is defined as the probability that an uncertain event will occur that can potentially produce losses to participants along the supply chain. Persistence of unmanaged risks in agriculture is a cause of great economic losses for farmers and other actors along the supply chains (for example, traders, processors, and exporters), affecting export earnings and food security. The agricultural sector risk assessment is a straightforward methodology based on a three-phase sequential process. Phase analyzes the chronological occurrence of inter-seasonal agricultural risks with a view to identify and prioritize the risks that are the drivers of agricultural GDP volatility. This report contains the findings and recommendations of the first phase and includes the identification, analysis, and prioritization of major risks facing the agricultural sector in Tanzania, as well as recommendations regarding key solutions. Chapter one gives introduction and context. Chapter two contains an overview of the agricultural sector and its performance, as well as a discussion of key agro-climatic, weather, and policy restrictions and opportunities. Chapter three includes an assessment of major risks (that is, production, market, and enabling environment risks) facing key export and food crops. Chapter four presents an estimate of historical losses due to realized production risks and a correlation of such losses with production volatility. Chapter five provides insights into the exposure to risks by different stakeholders and their actual capacities, vulnerabilities, and potential to manage agricultural risks. Chapter six presents a risk prioritization by different supply chains and discusses the possible solutions, as well as specific recommendations for the agricultural sector development program (ASDP).Publication Ten Steps to a Results-Based Monitoring and Evaluation System : A Handbook for Development Practitioners(Washington, DC: World Bank, 2004)An effective state is essential to achieving socio-economic and sustainable development. With the advent of globalization, there are growing pressures on governments and organizations around the world to be more responsive to the demands of internal and external stakeholders for good governance, accountability and transparency, greater development effectiveness, and delivery of tangible results. Governments, parliaments, citizens, the private sector, Non-governmental Organizations (NGOs), civil society, international organizations, and donors are among the stakeholders interested in better performance. As demands for greater accountability and real results have increased, there is an attendant need for enhanced results-based monitoring and evaluation of policies, programs, and projects. This handbook provides a comprehensive ten-step model that will help guide development practitioners through the process of designing and building a results-based monitoring and evaluation system. These steps begin with a 'readiness assessment' and take the practitioner through the design, management, and importantly, the sustainability of such systems. The handbook describes each step in detail, the tasks needed to complete each one, and the tools available to help along the way.