Does COVID-19 disrupt competition? Evidence from Iran

Purpose: Following the COVID-19 outbreak, there are concerns whether economies are becoming farther from equality and competency. While this matters to every economy, it is more crucial for developing ones who already suffer from income inequalities and lack of competency. The purpose of this paper is to address this issue. Design/methodology/approach: This study uses an administrative data from the Iran's Social Security Organization (ISSO) that provides insurance to workers entitled to the Labor Law of Iran. The data contain more than 7,000,000 workers. The authors assess heterogeneous impact of the first wave of the pandemic by firms' size and average payment. Findings: The authors' estimation results indicate that, following the initiation of the pandemic, the workers whose corresponding firms are smaller, overall, are more prone to the pandemic and are more likely to submit a request for unemployment benefits. However, the relation is neither homogeneous across sectors nor linear among micro-sized firms. Few sectors indicate a positive relationship between size and likelihood of request submission, including cultural activity, shoemaking and clothing sectors. Besides the size, the authors investigate whether pay grades could explain the probability of becoming unemployed after the pandemic. Results show that workers whose corresponding firms pay less are more likely to submit a request. This is robust within different sectors. Research limitations/implications: The ISSO dataset is not a panel, so the authors cannot employ methods of causal inferences. The authors' results should be seen as correlation;however, due to exogeneity and sharpness of the pandemic the result infers to some degree of causality. The data does not cover the informal sector, so the estimates are at lower boundary. Originality/value: Administrative data on unemployment benefits during COVID-19 show that the pandemic interferes with competition by forcing low-paid workers and small firms to exit the market. This is an alarm for the competition in every economy, specially developing ones. © 2023, Emerald Publishing Limited.

Who spends more to combat COVID-19 social risks and why?

COVID-19 has gone beyond a public health crisis and poses a serious threat to people's livelihoods. In response to the growing employment and income crisis, most OECD countries have introduced various policies and programs to alleviate rapidly rising social risks and stabilise people's livelihoods. However, these measures vary, with some governments spending only 1% of GDP in 2020, while others spent more than 10%. We conducted a multiple regression analysis to examine factors associated with the level of additional social spending in 31 OECD countries. The results indicate that lower generosity of unemployment benefits was associated with additional social policy spending. However, contrary to the hypothesis, higher additional spending was found among countries with higher levels of government debt. We ended with policy recommendations.

The effect of income support programs on job search, workplace mobility and COVID-19: International evidence.

This study examines the effect of Income Support Programs (ISPs) on job search effort, work- place mobility, COVID-19 cases, and mortality growth rates. To identify ISPs' causal effect, I use the variation in their introductions' timing across countries and implement a difference-in-difference and multi-event analysis method. I find that ISPs led to a 4.4-8.29 percentage points reduction in workplace mobility and a 6.6-11.6 percentage points reduction in job search effort levels. They also caused a 21.8-47.7 and 17.1-29.7 percentage points reduction in the COVID-19 case growth rate and COVID-19 mortality growth rates, respectively. Using the event analysis estimates, I simulated the counterfactual job search effort, workplace mobility, and the number of COVID-19 cases and mortality without income support programs. The average global job search effort and workplace mobility without ISPs would have been 11.12 and 9.26 percent higher than the observed mean job search effort and workplace mobility. However, these would have come at the cost of 3.69 million and 166, 690 additional COVID-19 cases and mortality than the cases and deaths registered by May 15th.