COVID-19 Social Policy Responses and Economic Well-Being: Evidence from 164 Countries

Introduction: The COVID-19 pandemic severely disrupted the health and economic well-being of populations worldwide. Existing research has primarily focused on containment policies and the broader consequences of the pandemic or health and containment policies, with comparatively limited attention to the effectiveness of social policy responses. This study addresses the question: which social policies were most effective in mitigating the pandemic’s economic consequences? We focus on economic well-being at both the country and individual levels.

Methods: We construct a country-level dataset that combines indicators of COVID-19 social policy responses with economic outcomes from multiple sources. Economic outcomes include unemployment rates (World Bank) and measures of subjective financial strain and food and housing insecurity (Gallup World Poll, 2000–2023). Key independent variables capture pandemic-related social policy responses, including the number and types of measures (e.g., income protection, job protection, family policies) as well as policy spending information. These data are drawn from the International Labour Organization, the World Bank (Gentilini et al., 2021), the IMF Fiscal Monitor Database (IMF Fiscal Affairs Department, 2021), and social protection spending data (Demirgüç-Kunt et al., 2024). Information on pandemic phases and policy stringency is obtained from the Oxford COVID-19 Government Response Tracker (Hale et al., 2021), covering March 2020 to December 2022, and coded into pre-pandemic, pandemic, and post-pandemic periods. Additional controls include demographic indicators (United Nations, 2024) and COVID-19 mortality data (OxCGRT). We estimate country fixed-effects models to assess the relationship between social policy responses and economic outcomes.

Results: Job protection measures are consistently associated with improved economic outcomes, whereas basic needs or social assistance–oriented measures show a negative association. Greater reliance on social assistance and basic needs support is linked to higher unemployment rates and increased subjective economic hardship during and/or after the pandemic. In contrast, stronger job protection policies are associated with lower unemployment and reduced financial strain during and/or after the pandemic. Moreover, a higher number of social policy responses spanning multiple domains is associated with lower levels of subjective economic hardship in the post-pandemic period.

Conclusion and Implications: The findings highlight pathways through which social policy responses shape economic resilience during crises. Policies that meet basic needs alone appear insufficient to offset pandemic-induced economic hardship. By contrast, job protection measures play a critical role in buffering economic shocks by stabilizing employment and reducing material and financial strain. These results offer important insights for the design of social policy responses to future large-scale shocks.