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The unemployment effects of closing the non-essential activities during the COVID-19 lockdown: The case of 8,108 Spanish municipalities

Serra, Laura and Silva, José I. and Vall·llosera, Laura (2022): The unemployment effects of closing the non-essential activities during the COVID-19 lockdown: The case of 8,108 Spanish municipalities.

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Abstract

We study the labour market impact of the confinement measures implemented in Spain to halt the spread of the COVID-19 pandemic in the first quarter of 2020. We use data from 8,108 municipalities to quantify the short-term impact of the temporary shutdown of non-essential activity on local unemployment rates. Ordinary least squares regressions show that an increment of 10 percentage points in the share of firms with non-essential activities increases the unemployment rate between 0.08 and 0.22 percentage points, depending on the population size of the municipalities. We only find this positive effect in municipalities above 2,395 inhabitants. The lockdown explains around 50% of the observed increase in the unemployment rates of these municipalities. We also look at the impact by gender and age and find that the lockdown of these activities affects males and workers between 25 and 45 years old by relatively more.

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