The Impact of COVID-19 on Economic Activity: Evidence from Administrative Tax Registers
2 July 2021
The estimates also show that the impact of the pandemic varies with the intensity of the Coronavirus infection rates. [...] Except for the bottom-right panel which is the preferred one in the paper, the rest of the panels in Figure A1 are in practice indistinguishable from each other. [...] First, the longer the distance between the treatment and control years, the harder it is to argue that the equivalent of assumption (3) holds. [...] Since all quartile groups, in varying degrees, have been affected by the local COVID infection rate, it is hard to pinpoint the relative effect sizes of the general downturn of the economy due to COVID and the extra effect due to the local infection rate. [...] drastic decrease is a combined effect of the reduction in the payroll tax rate (described in section 3) and the drop in employment during the downturn.