The Impact of COVID-19 Lockdowns on Household Income, Consumption, and Expectations: Evidence from High-frequency Data in Indonesia

Poverty and Inequality Analysis
Monitoring, Evaluation and Learning
Policy Research

This paper presents an investigation of the causal impact of COVID-19, through lockdowns, on household income, income expectations, consumption of durable goods, and budget allocation in Indonesia using high-frequency data from the monthly Bank Indonesia consumer survey with more than 176,000 respondents. The authors find that COVID-19 lockdowns have a large and significant adverse impact on households’ income, expectations, and consumption. They also find that households try to smooth consumption in the face of declining income, resulting in a significant increase in the budget allocation for consumption while reducing the shares of debt installments and savings. The impact of lockdown on households is also heterogeneous by expenditure levels, regions, and levels of education. These findings have important policy implications to cushion the pandemic’s impact on households and ensure a more inclusive recovery.

Research Area 
Research Topic 
Publication Type 
Journal Article

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