Economic Burden of COVID-19 Lockdown on the Poor

The COVID-19 pandemic caused the largest number of lockdowns across the globe, affecting nearly half of the world's population by the first week of April 2020. The biggest lockdown was the one declared by the Indian government. All economic activity was shut down overnight, impacting the lives of the nation's 1.3 billion people. The economic impacts of lockdowns on the poor are little understood because the data have not been available. We have been tracking the weekly financial activities of a sample of poor households in rural India for over a year. Using this unique high-frequency weekly data before India's COVID-19 lockdown and supplementing that dataset with phone-call surveys conducted on the same households for four weeks after the lockdown announcement, we econometrically estimate the impacts of the lockdown. Our analysis reveals that in the first four weeks after India's lockdown announcement, poor households lost INR 1,022 (US$ 13.5), which is about 88 percent of their average weekly income from the previous year. In addition to the income loss, households reduced meal portions and consumed fewer food items. The poorer households were hit harder, but government food aid slightly mitigated the negative impacts