Research Insights: Can Better Infrastructure Offset the Negative Impacts That COVID-19 Has Had on Productivity in Different Economic Sectors?
Date issued
Sep 2021
Publication
Subject
Coronavirus;
Pandemic;
Productivity Growth;
Productivity Shock;
Labor Productivity;
Manufacturing Industry;
Infrastructure Development;
Infrastructure Work;
Construction Industry
JEL code
O47 - Empirical Studies of Economic Growth • Aggregate Productivity • Cross-Country Output Convergence;
C51 - Model Construction and Estimation
Category
Catalogs and Brochures
The effects of COVID-19 have been stronger in service-related subsectors, where supply and/or demand were constrained by lockdowns and social distancing measures. The losses in these subsectors have had direct impacts-through their weight in countries GDP-and indirect impacts through their effect on other sectors. In Latin America, effects on the three most affected sectors-wholesale, retail, and hospitality services; construction; and manufacturing-add up to a 4.9 percent hit to economy-wide labor productivity through direct and indirect channels. Large productivity improvements in infrastructure may be needed to fully compensate for the negative productivity losses traceable to COVID-19.