Economic Analysis Series No.204THE ECONOMIC ANALYSIS

September, 2022
“What can we learn from COVID-19 Shock?
(Review Articles)
The COVID-19 Pandemic and Japanese Household Behavior : Employment, Consumption, and Family
The lmpact of the COVID-19 Crisis on Firm Activities in Japan
Behavioral Changes during the COVID-19 Pandemic A Survey of Empirical studies in Japan
Takashi OSHIO
ESRI Economic Policy Forum “What can we learn from COVID-19 Shock?”
Economic and Social Research Institute
Microeconomic shocks and Macroeconomic Forecasts- Inflation Expectations amid COVID-19 -
Yuta IIZUKA, Junichi KIKUCHI, Yoshiyuki NAKAZONO
ESRI International Conference “Corporate Investment for Enhancing Innovation and Productivity”
Economic and Social Research Institute

The full text is written in Japanese.


The COVID-19 Pandemic and Japanese Household Behavior: Employment, Consumption, and Family

By Hiroshi TERUYAMA and Masako KIMURA

We evaluated the impact of the COVID-19 pandemic on Japanese households by reviewing the empirical studies from the employment, consumption, and family perspectives. Through various data and methods, the literature on employment showed that the pandemic's negative impact on work opportunities and income was concentrated in industries with interpersonal services and human mobility and in occupations that made flexible work arrangements such as teleworking difficult. The high ratio of non-regular employment in these sectors resulted in the loss of labor opportunities and income for many young people, particularly women. The literature on consumption studied declining consumption expenditures through two factors: income decline and infectious hazards. The studies on the fixed benefit effect showed that household consumption under liquidity constraints is more sensitive to income. The studies on infectious hazards approach indicated that consumption opportunities were reduced among the older adult population because of fear of infection. Many studies on families focused on telework and the increased burden of childcare because of school closures and other factors. Telework, which became widespread during this period, was undertaken by workers with better conditions, which raised concerns about widening inequalities in work styles; however, it also increased commitment toward the family and improved people's well-being. In addition, the increased burden of childcare negatively affected women's employment and mental health.

JEL Classification Codes: D10, J21, J81
Keywords: COVID-19, Household behavior, Inequality

The Impact of the Covid-19 Crisis on Firm Activities in Japan


This paper summarizes the implications of the recent studies on the impact of the COVID-19 on firm activities. First, despite the fact that the speed of recovery of the Japanese economy has been slower than that of other developed countries, the number of corporate bankruptcies has not increased so far presumably thanks to generous government support. Firms responded to sales decline by raising funds and giving workers temporary breaks. Given more firms faced tight finance conditions before the COVID-19 shock than before the global financial crisis, they use the interest-free and unsecured programs through private financial institutions and government-affiliated financial institutions. While firms with higher credit risk before the COVID-19 shock evidently applied for loans by government financial institutions, we did not find that the proportion of zombie firms increased during the COVID-19 shock more than during the global financial crisis. Second, the recent studies on the effects of Go To Travel report that the effect of a support measure for the accommodation industry were mixed. In addition, it was pointed out that it is important to equalize the occupancy rate in order to improve productivity in service industries, and that flexible working hours are important for this purpose. Third, it was shown that although the new way of working was forcibly introduced by COVID-19, it is important for firms to accumulate management skills, technology, and intangibles to implement Working from home (WFH), and that the productivity of WFH is gradually increasing, although it is lower than that of workplace working. It is hoped that new ways of working, such as WFH, will continue in the future from the perspective of infection prevention. It will be necessary for firms to continue to improve their environments to accommodate new ways of working

JEL Classification Codes: E00, E60, G20, H32
Keywords: Firms, Effectively Interest-free and Unsecured Loans, Zombie firms, Working from Home

Behavioral Changes during the COVID-19 Pandemic: A Survey of Empirical studies in Japan

By Takashi OSHIO

The COVID-19 pandemic may have substantially affected individuals’ behavior in various aspects in Japan. This survey is to review recent researches on pandemic-related behavioral changes and their impacts, focusing on the studies based on Japanese data at the relatively early stages of the pandemic. The survey focuses on changes in people’s mobility, lifestyle, demand for medical service and education, and subjective well-being. Researchers have been utilizing large data collected online and infection-related regional variations as well as taking interdisciplinary approaches. Findings generally show that behavioral changes vary substantially depending on individuals’ socioeconomic positions, suggesting that policy measures are needed to tackle the socioeconomic disparity in the impact of the pandemic.

JEL Classification Codes: I12, I14, I24, I31
Keywords: behavioral changes, mental health, working from work

ESRI Economic Policy Forum “What can we learn from COVID-19 Shock?”

Economic and Social Research Institute

Microeconomic shocks and Macroeconomic Forecasts-Inflation Expectations amid COVID-19-

By Yuta IIZUKA, Junichi KIKUCHI and Yoshiyuki NAKAZONO

Following Kikuchi and Nakazono (forthcoming), we propose a novel approach for measuring inflation expectations, which can alleviate the rounding number problem. Matching the new measure for inflation expectations with a survey on job and income losses due to COVID-19, we examine whether inflation expectations are influenced by idiosyncratic shocks. We find that negative income shocks affect inflation expectations amid the pandemic of COVID-19. The evidence implies that economic shocks at the household level influence their macroeconomic forecasts.

JEL Classification Codes: C53, D84, E31
Keywords: disagreement, expectations, forecast bias, idiosyncratic shock, income shock, inflation, rounding, stagflation

ESRI International Conference 2021“Corporate Investment for Enhancing Innovation and Productivity”

Economic and Social Research Institute