Impacts of the COVID lockdown on household incomes: evidence from Punjab, India

In response to the beginnings of the COVID-19 pandemic, India's government instituted a severe nationwide lockdown in late March 2020. In this paper, we analyze household survey data on income from an Indian state, Punjab. We analyze the impacts of the pandemic and lockdown on total household income, as well as its components, including wages, business income and transfers. This paper innovates in this area by using Poisson Pseudo Maximum Likelihood estimation to deal with the skewed distributions of various income components, as well as quantile regressions to examine differential impacts across the income distribution. We examine the differences between rural and urban households, differential impacts on female-headed and laborer households, and the time pattern of impacts. We find that rural households experienced more persistent income declines than urban households, and their wages suffered relatively more. Households with daily laborers were most badly affected, and this was especially true at the bottom of the income distribution.