Heterogeneous consumption and income responses during the Covid-19 crisis

This project aims to examine the distributional consequences of the Covid-19 pandemic using the Singapore Life Panel (SLP), a unique monthly panel dataset which contains detailed information on income, consumption and wealth for a representative sample of Singaporeans between 50 and 70 years old. In particular, we ask the following three questions: First, what are the characteristics of households whose occupations are mostly affected by social distancing, a public health measure widely implemented during the Covid-19 outbreak? Second, how income and consumption responses vary across occupations and household characteristics including their balance sheets? Third, what are the implications for designing subsidy packages in combat with the Covid-19? Our results will provide empirical evidence on the distributional effects of social distancing and identify groups of households that are mostly affected by the Covid-19 pandemic. Our empirical findings will also reconcile the mechanisms from existing macroeconomic models of heterogeneous agent and incomplete markets.