Health, Labour supply and demand

Research articles · Dec 31, 2022

Simulations of Policy Responses During the COVID-19 Crisis in Argentina: Effects on Socioeconomic Indicators

Julian Martinez-Correa, Guillermo Cruces, Juan Menduiña, Jorge Puig

Center for Distributive, Labor and Social Studies (CEDLAS). Institute of Economic Research of the Faculty of Economic Sciences at the National University of La Plata (UNLP), La Plata, Argentina

Volume 15(3) Winter 2022

Cite as: J. Martinez-Correa, G. Cruces, J. Menduiña, J. Puig; 2022; Simulations of Policy Responses During the COVID-19 Crisis in Argentina: Effects on Socioeconomic Indicators; International Journal of Microsimulation; 15(3); 38–60. doi: 10.34196/ijm.00269

Abstract

This paper simulates the effects of policy responses to the COVID-19 pandemic on household income and employment in Argentina, using household survey data and administrative data on employment and wages by economic sectors. The paper also includes a gender and age group analysis. The results indicate that during the COVID-19 crisis, household income decreased. This welfare loss was nonlinear along the income distribution, with the lowest income earners suffering the most due to relatively higher informality at the bottom of the income distribution. The policy responses seem to ameliorate by around one-third what the average drop in household income, and prevented major increases in poverty and inequality.

This article contains 5 figures and 8 tables.

Figures

Figure 1. Pre-COVID-19 scenario. Distribution of workers by gender, age groups, and sectors.. Source: Authors’ own calculations based on Ministry of Labor, Employment and Social Security and INDEC. Notes: In percentage.
Figure 2. Pre-COVID-19 scenario. Share of informal workers by deciles, gender, and sectors.
Figure 3. Post-COVID-19 scenario. Simulation of employment loss and relative participation of woman. By sectors.. Source: Authors’ own calculations based on Ministry of Labor, Employment and Social Security and INDEC. Notes: In thousands of workers and percentage. Second quarter of 2020.
Figure 4. Post-COVID-19 scenario. Change on employment rate by age groups and gender.. Source: Authors’ own calculations based on Ministry of Labor, Employment and Social Security and INDEC. Notes: In percentage. Second quarter versus first quarter 2020.
Figure 5. Distribution of public assistance beneficiaries.. Source: Authors’ own calculations based on EPH-INDEC. Notes: In percentage. By deciles of per capita income. Second quarter of 2020.

Tables

Table 1. Average per capita income by deciles. Pre- and post-COVID-19 scenarios with and without policy responses.
Pre-COVID-19Post-COVID-19 scenario (without policy responses)Post-COVID-19 scenario (with policy responses)
1st quarter 20201 quarter ahead2 quarters ahead3 quarters ahead1 quarter ahead2 quarters ahead3 quarters ahead
Decile[1][2][3][4][5][6][7][8][9][10][11][12][13]
LevelLevelLevelChange [4] - [1] (in %)LevelChange [6] - [2] (in %)LevelChange [8] - [2] (in %)LevelChange [10] - [1] (in %)LevelChange [12] - [6] (in %)
12841.81974.02396.1-15.692387.220.92842.744.03205.812.82977.324.7
25822.44250.35004.4-14.054813.713.34924.515.95623.7-3.45272.99.5
38189.06176.97258.7-11.366884.811.56762.29.57777.8-5.07216.84.8
410367.57807.29200.6-11.268641.310.78294.36.29628.1-7.18882.42.8
512978.910347.111763.7-9.3611096.37.210769.74.112139.6-6.511302.51.9
616019.612918.214818.0-7.5013599.75.313262.02.715125.3-5.613778.41.3
719789.516368.618590.6-6.0617035.54.116628.71.618830.7-4.817201.91.0
825037.321413.723702.7-5.3321507.70.421645.31.123917.8-4.521648.20.7
933516.628733.532248.0-3.7828544.9-0.728899.30.632393.6-3.428632.50.3
1064559.554499.162174.1-3.6953405.3-2.054617.70.262283.2-3.553458.70.1
All19914.016450.418717.4-6.0116793.12.116866.12.519094.2-4.117038.61.5

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: In pesos and percentage change. Deciles of per capita income. Workers in Argentina benefit from a wage bonus, aguinaldos, that is paid twice a year in June and December. Therefore, they are registered and included in the first and third quarters of our simulations but not in the second and fourth ones. Thus, to provide an accurate comparison, the pre-COVID-19 scenario should be compared with the second-quarter-ahead scenario. This is valid for both the scenario with and without policy responses.

Table 2. Average per capita income by economic sector. Pre- and post-COVID-19 scenarios with and without policy responses.
Pre-COVID-19Post-COVID-19 scenario (without policy responses)Post-COVID-19 scenario (with policy responses)
1st quarter 20201 quarter ahead2 quarters ahead3 quarters ahead1 quarter ahead2 quarters ahead3 quarters ahead
Sector[1][2][3][4][5][6][7][8][9][10][11][12][13]
LevelLevelLevelChange [4] - [1] (in %)LevelChange [6] - [2] (in %)LevelChange [8] - [2] (in %)LevelChange [10] - [1] (in %)LevelChange [12] - [6] (in %)
Primary activities35381.321090.530087.9-15.026230.824.421475.71.830381.8-14.126371.90.5
Manufacturing19020.615046.617550.6-7.715612.83.815475.12.817934.3-5.715805.11.2
Construction14493.511537.613414.3-7.412220.95.912143.85.313973.7-3.612508.12.3
Commerce18401.614723.317100.0-7.115525.35.415222.03.417555.6-4.615757.61.5
Hotels and rest.17049.412384.315147.9-11.213652.510.212929.24.415621.6-8.413863.41.5
Transp. and com.24533.319042.122514.4-8.219857.14.319379.41.822809.8-7.020001.70.7
Financial serv.28750.723060.526614.6-7.423550.02.123382.01.426895.2-6.523663.00.5
Education27983.423147.526406.0-5.622707.2-1.923274.80.526517.7-5.222749.40.2
Social-health serv.28959.724465.727630.8-4.623864.5-2.524641.00.727787.5-4.023940.10.3
Domestic serv.12080.59108.910891.3-9.89969.39.49935.19.111662.2-3.510285.23.2
Other serv.21463.217921.920225.8-5.818127.41.118367.12.520634.8-3.918318.01.1
All24460.219423.322737.1-7.019843.02.219819.12.023093.7-5.620004.70.8

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: In pesos and percentage change. Deciles of per capita income. Workers in Argentina benefit from a wage bonus, aguinaldos, that is paid twice a year in June and December. Therefore, they are registered and included in the first and third quarters of our simulations but not in the second and fourth ones. Thus, to provide an accurate comparison, the pre-COVID-19 scenario should be compared with the second-quarter-ahead scenario. This is valid for both the scenario with and without policy responses.

Table 3. Poverty, inequality indicators, and number of poor by gender. Pre- and post-COVID-19 scenarios with and without policy responses.
Pre-COVID-19Post-COVID-19 scenario (without policy responses)Post-COVID-19 scenario (with policy responses)
1st quarter 20201 quarter ahead2 quarters ahead3 quarters ahead1 quarter ahead2 quarters ahead3 quarters ahead
SectorGroup[1][2][3][4][5][6][7][8][9][10][11][12][13]
LevelLevelLevelChange [4] - [1] (in %)LevelChange [6] - [2] (in %)LevelChange [8] - [2] (in %)LevelChange [10] - [1] (in %)LevelChange [12] - [6] (in %)
Panel A. Indigence, poverty, and inequality indicators
Extreme poverty
FGT (0)8.618.012.545.313.3-26.315.3-14.810.016.611.2-15.3
FGT (1)3.210.16.190.96.1-40.37.1-30.44.128.94.8-20.2
FGT (2)1.97.74.3123.74.2-46.14.5-42.42.531.03.3-20.6
Moderate poverty
FGT (0)34.645.639.213.543.3-5.243.8-4.037.37.942.0-3.0
FGT (1)13.622.917.729.719.0-16.920.2-11.715.513.417.5-7.9
FGT (2)7.615.611.146.011.6-25.512.6-18.98.917.710.2-12.0
Inequality
Gini0.4410.4650.4553.10.444-4.70.465-0.10.4501.90.435-2.0
Theil0.3450.3820.3666.00.347-9.10.381-0.20.3573.50.333-4.0
ATK (0)0.0000.0000.0000.0000.0000.0000.000
ATK (0.5)0.1600.1810.1716.90.162-10.40.180-0.40.1674.20.154-4.7
ATK (1)0.3000.3470.3237.90.306-11.80.344-0.80.3155.10.289-5.5
ATK (2)0.5460.6450.5969.00.562-12.90.625-3.10.5826.40.525-6.7
Panel B. Poverty and inequality indicators, by gender
Moderate poverty
PovertyHead male31.843.336.414.341.3-4.641.4-4.534.38.040.2-2.9
IncidenceHead female38.649.043.412.546.1-5.947.4-3.441.67.944.6-5.9
Population34.645.639.213.543.3-5.243.8-4.037.37.942.0-4.2
Inequality
GiniHead male0.4290.4440.4392.40.428-3.50.4460.30.4351.40.420-5.6
Head female0.4580.4960.4784.20.465-6.20.492-0.90.4702.50.454-7.6
Population0.4410.4650.4553.10.444-4.70.465-0.10.4501.90.435-6.5
Panel C. Number of poor
Head male5,376,7787,324,5506,147,894771,1166,986,696-337,8546,997,154-327,3965,804,325427,5476,795,035-191,661
Head female4,489,2915,698,9835,045,405556,1145,365,024-333,9595,505,334-193,6494,841,836352,5455,181,325-183,699
Population9,866,06913,023,53311,193,2991,327,23012,351,720-671,81312,502,488-521,04510,646,161780,09211,976,360-375,360

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: Workers in Argentina benefit from a wage bonus, aguinaldos, that is paid twice a year in June and December. Therefore, they are registered and included in the first and third quarters of our simulations but not in the second and fourth ones. Thus, to provide an accurate comparison, the pre-COVID-19 scenario should be compared with the second-quarter-ahead scenario. This is valid for both the scenario with and without policy responses.

Table A1. Employment and wage variations.
Employment variations
Sector1q ahead2q ahead3q ahead
FormalInformalFormalInformalFormalInformal
Primary-0.63-0.90-0.36-0.52-0.30-0.43
Manufacturing-0.18-0.33-0.10-0.19-0.08-0.16
Construction-0.17-0.27-0.10-0.15-0.08-0.13
Commerce-0.12-0.44-0.07-0.25-0.06-0.21
Hotels and rest.-0.31-0.45-0.18-0.26-0.15-0.21
Transp. and com.-0.19-0.44-0.11-0.25-0.09-0.21
Financial serv.-0.25-0.44-0.14-0.26-0.12-0.21
Education-0.28-0.72-0.16-0.42-0.13-0.34
Health-0.17-0.58-0.10-0.33-0.08-0.27
Domestic serv.-0.24-0.29-0.14-0.17-0.11-0.14
Other-0.12-0.33-0.07-0.19-0.06-0.15
Average-0.24-0.47-0.14-0.27-0.11-0.22
Wage variations
FormalInformalFormalInformalFormalInformal
-0.00340.020.050.130.160.25

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: We assume zero variations on public employment. For wage variations, we use the same criteria than for the rest of employees (INDEC). These are, for each quarter, 1,95 percent, 7.19 percent, and 15.22 percent, respectively.

Table A2. Logistic regression on the probability of being employed: Formal and informal workers.
Pr (employed=1)
FormalInformal
Gender (male==1)1.307***1.275***
(0.344)(0.317)
Age0.212***0.0964***
(0.0157)(0.0135)
Age2-0.00198***-0.000818***
(0.000184)(0.000165)
Incomplete primary-0.265-0.891
(0.976)(0.804)
Complete primary0.496-0.561
(0.925)(0.782)
Incomplete secondary0.334-0.773
(0.918)(0.776)
Complete secondary0.637-0.86
(0.915)(0.774)
Incomplete tertiary0.406-0.897
(0.917)(0.776)
Complete tertiary1.053-1.14
(0.904)(0.763)
Head of HH0.845***0.484***
(0.121)(0.104)
# of children0.237**0.127
(0.111)(0.0968)
Marriage status0.627***0.368***
(0.0796)(0.0674)
# HH members0.156***0.0783***
(0.0231)(0.0177)
HH per capita income (log)2.013***0.552***
(0.062)(0.0439)
Observations11,6568,478
R20.36130.0645

Source: Authors’ own estimates based on the Permanent Household Survey (EPH). Notes: Robust standard errors are in parentheses. Statistical significance *** p < 0.01, ** p < 0.05, * p < 0.1. Interaction terms and intercept are included but not reported for briefness.

Table A3. Employment by gender. Pre-COVID-19 (1st quarter of 2020) versus Post-COVID-19 (2nd quarter of 2020). Number of employed people and percentage change.
1st quarter 20202nd quarter 2020Change
LevelLevel%
MaleFemaleAllMaleFemaleAllMaleFemaleAll
Primary91,75029,883121,63334,63610,94545,581-62.2-63.4-62.5
Manufacturing874,726451,8271,326,553708,487332,9081,041,395-19.0-26.3-21.5
Construction1,044,27322,0011,066,274810,56319,909830,472-22.4-9.5-22.1
Commerce1,311,071883,7832,194,8541,012,360608,8651,621,225-22.8-31.1-26.1
Hotels and rest.278,457183,943462,400191,980104,309296,289-31.1-43.3-35.9
Transp. and com.778,999135,834914,833598,01291,637689,649-23.2-32.5-24.6
Financial serv.783,739528,8981,312,637566,354389,737956,091-27.7-26.3-27.2
Education239,797735,108974,905201,445623,182824,627-16.0-15.2-15.4
Health1,033,5301,123,8072,157,337965,2031,004,3771,969,580-6.6-10.6-8.7
Domestic serv.47,380942,717990,09724,948697,099722,047-47.3-26.1-27.1
Other246,806276,809523,615214,327211,890426,217-13.2-23.5-18.6
Total6,730,5285,314,61012,045,1385,328,3154,094,8589,423,173-20.8-23.0-21.8

Source: Authors’ own estimates based on Permanent Household Survey (EPH). Notes: The table includes all types of employment (public, private, and self-employment).

Table A4. Average per capita income by deciles and by gender. Pre- and post-COVID-19 scenarios with and without policy responses. In pesos and percentage change.
Pre-COVID-19Post-COVID-19 scenario (without policy responses)Post-COVID-19 scenario (with policy responses)
1st quarter 20201 quarter ahead2 quarters ahead3 quarters ahead1 quarter ahead2 quarters ahead3 quarters ahead
DecilGroup[1][2][3][4][5][6][7][8][9][10][11][12][13]
LevelLevelLevelChange[4] - [1](in %)LevelChange[6] - [2](in %)LevelChange [8] - [2](in %)LevelChange [10] - [1](in %)LevelChange [12] - [6] (in %)
1Head male2876.82019.12386.4-17.052382.718.02812.639.33114.08.22856.419.9
Head female2810.41933.52404.7-14.432391.323.72869.848.43288.317.03085.929.1
Decile2841.81974.02396.1-15.692387.220.92842.744.03205.812.82977.324.7
2Head male5881.14534.65227.2-11.125008.110.45173.814.15795.6-1.55413.68.1
Head female5754.53920.84746.2-17.524588.417.04635.618.25424.5-5.75109.711.4
Decile5822.44250.35004.4-14.054813.713.34924.515.95623.7-3.45272.99.5
3Head male8223.86429.17382.5-10.236966.78.47001.68.97889.2-4.17301.94.8
Head female8138.55810.27078.7-13.026765.816.46414.110.47615.7-6.47093.14.8
Decile8189.06176.97258.7-11.366884.811.56762.29.57777.8-5.07216.84.8
4Head male10352.47943.79356.1-9.628676.89.28400.75.89757.7-5.78876.92.3
Head female10389.57609.18974.6-13.628589.712.98139.77.09439.9-9.18890.43.5
Decile10367.57807.29200.6-11.268641.310.78294.36.29628.1-7.18882.42.8
5Head male12904.410491.411875.5-7.9711122.06.010852.83.412204.3-5.411323.51.8
Head female13082.110147.311608.8-11.2611060.89.010654.55.012050.0-7.911273.41.9
Decile12978.910347.111763.7-9.3611096.37.210769.74.112139.6-6.511302.51.9
6Head male16017.413231.714856.3-7.2513547.22.413519.32.215123.6-5.613710.41.2
Head female16023.912326.614745.6-7.9813698.811.112776.43.615128.6-5.613906.71.5
Decile16019.612918.214818.0-7.5013599.75.313262.02.715125.3-5.613778.41.3
7Head male19768.016373.918662.9-5.5917113.04.516612.01.518883.1-4.517261.50.9
Head female19819.516361.218490.0-6.7116927.53.516651.91.818757.7-5.417118.91.1
Decile19789.516368.618590.6-6.0617035.54.116628.71.618830.7-4.817201.91.0
8Head male24920.421226.223533.0-5.5721187.1-0.221430.01.023721.8-4.821320.80.6
Head female25243.521744.724002.2-4.9222073.21.522025.21.324263.6-3.922225.90.7
Decile25037.321413.723702.7-5.3321507.70.421645.31.123917.8-4.521648.20.7
9Head male33505.828632.532187.2-3.9428267.5-1.328791.90.632330.1-3.528354.10.3
Head female33536.628922.232361.5-3.5029063.20.529100.10.632512.2-3.129152.70.3
Decile33516.628733.532248.0-3.7828544.9-0.728899.30.632393.6-3.428632.50.3
10Head male64176.453944.661847.3-3.6352654.1-2.454050.20.261947.0-3.552708.00.1
Head female65193.755416.962714.9-3.8054648.5-1.455557.00.362839.6-3.654701.10.1
Decile64559.554499.162174.1-3.6953405.3-2.054617.70.262283.2-3.553458.70.1
AllHead male20717.017218.319557.8-5.6017406.41.117583.72.119888.1-4.017616.41.2
Head female18746.615334.117495.6-6.6715901.63.715823.03.217940.1-4.316198.61.9
Population19914.016450.418717.4-6.0116793.12.116866.12.519094.2-4.117038.61.5

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: Workers in Argentina benefit from a wage bonus, aguinaldos, that is paid twice a year in June and December. Therefore, they are registered and included in the first and third quarters of our simulations but not in the second and fourth ones. Thus, to provide an accurate comparison, the pre-COVID-19 scenario should be compared with the second-quarter-ahead scenario. This is valid for both the scenario with and without policy responses.

Table A5. Average per capita income by economic sector and by gender. Pre- and post-COVID-19 scenarios with and without policy responses. In pesos and percentage change.
Pre-COVID-19Post-COVID-19 scenario (without policy responses)Post-COVID-19 scenario (with policy responses)
1st quarter 20201 quarter ahead2 quarters ahead3 quarters ahead1 quarter ahead2 quarters ahead3 quarters ahead
SectorGroup[1][2][3][4][5][6][7][8][9][10][11][12][13]
LevelLevelLevelChange [4] - [1] (in %)LevelChange [6] - [2] (in %)LevelChange [8] - [2] (in %)LevelChange [10] - [1] (in %)LevelChange [12] - [6] (in %)
Primary act.Head male36813.822837.432161.1-12.627830.721.923202.81.632424.3-11.927945.60.4
Head female30860.115576.923544.3-23.721181.236.016024.42.923934.9-22.421405.01.1
Sector35381.321090.530087.9-15.026230.824.421475.71.830381.8-14.126371.90.5
Manufac-
turing
Head male19989.816026.318621.2-6.816331.71.916396.82.318954.0-5.216485.80.9
Head female17260.713267.515606.6-9.614307.47.813801.54.016082.7-6.814568.91.8
Sector19020.615046.617550.6-7.715612.83.815475.12.817934.3-5.715805.11.2
Constru- ctionHead male14908.312140.813967.8-6.312659.04.312779.05.314558.4-2.312928.42.1
Head female13641.810299.112277.8-10.011321.59.910839.45.212773.2-6.411645.02.9
Sector14493.511537.613414.3-7.412220.95.912143.85.313973.7-3.612508.12.3
CommerceHead male18750.615335.017579.7-6.215853.33.415799.73.018006.8-4.016066.31.3
Head female17827.313716.816310.7-8.514985.79.314271.44.016813.1-5.715249.81.8
Sector18401.614723.317100.0-7.115525.35.415222.03.417555.6-4.615757.61.5
Hotels and rest.Head male17423.513116.415739.9-9.714196.08.213640.74.016204.1-7.014368.01.2
Head female16560.211427.014373.7-13.212941.813.311998.85.014859.8-10.313203.52.0
Sector17049.412384.315147.9-11.213652.510.212929.24.415621.6-8.413863.41.5
Tran. and com.Head male24247.919141.422432.7-7.519678.42.819477.11.822731.1-6.319824.20.7
Head female25173.418819.422697.5-9.820257.97.619160.11.822986.2-8.720399.60.7
Sector24533.319042.122514.4-8.219857.14.319379.41.822809.8-7.020001.70.7
Financial serv.Head male29727.024441.827713.6-6.824574.50.524728.01.227967.8-5.924683.90.4
Head female26969.820540.524609.8-8.821681.15.620926.51.924938.6-7.521800.60.6
Sector28750.723060.526614.6-7.423550.02.123382.01.426895.2-6.523663.00.5
EducationHead male28563.823565.426985.3-5.522982.5-2.523658.50.427069.8-5.223015.40.1
Head female27261.222627.425685.2-5.822364.7-1.222797.20.825830.7-5.222418.40.2
Sector27983.423147.526406.0-5.622707.2-1.923274.80.526517.7-5.222749.40.2
Soc. and healthHead male30351.325821.129034.2-4.325062.0-2.925963.80.629162.2-3.925120.40.2
Head female26952.022510.325606.0-5.022136.8-1.722732.71.025804.1-4.322237.40.5
Sector28959.724465.727630.8-4.623864.5-2.524641.00.727787.5-4.023940.10.3
Domestic serv.Head male12683.29882.211586.0-8.710526.56.510427.75.512094.6-4.610771.92.3
Head female11652.98560.410398.5-10.89574.011.89585.712.011355.6-2.69939.93.8
Sector12080.59108.910891.3-9.89969.39.49935.19.111662.2-3.510285.23.2
Other serv.Head male21020.817336.819808.2-5.817438.20.617710.42.220149.1-4.117577.50.8
Head female22221.418924.420941.3-5.819308.42.019492.43.021467.2-3.419586.91.4
Sector21463.217921.920225.8-5.818127.41.118367.12.520634.8-3.918318.01.1
AllHead male24977.520058.823392.5-6.320294.41.220405.71.723705.5-5.120434.20.7
Head female23659.218439.321722.3-8.219144.03.818910.92.622146.5-6.419339.61.0
All Sectors24460.219423.322737.1-7.019843.02.219819.12.023093.7-5.620004.70.8

Source: Authors’ own calculations based on Ministry of Production and Labor and EPH-INDEC. Notes: Workers in Argentina benefit from a wage bonus, aguinaldos, that is paid twice a year in June and December. Therefore, they are registered and included in the first and third quarters of our simulations but not in the second and fourth ones. Thus, to provide an accurate comparison, the pre-COVID-19 scenario should be compared with the second-quarter-ahead scenario. This is valid for the scenario with and without the policy response.