IMPACT OF COVID-19 ON INDIVIDUAL INCOME IN TOURISM AND HOSPITALITY INDUSTRY: A DIFFERENCE-IN-DIFFERENCES APPROACH

Abstract

This paper investigates the impact of COVID-19 (or Novel Coronavirus) pandemic on the income of individuals working in tourism and hospitality industry. As the tourism and hospitality is a labor-intensive industry, the impact of COVID-19 pandemic-induced economic downturn is expected to be particularly severe here. I use a large, representative panel survey from India, and difference-indifferences method for this study. The estimated decline in total income ranges between 3.12% to 6.39%, and wage fall ranges between 3.21% to 5.98%, for the sample with individuals who are still earning a non-zero income from this industry. Once I include the individuals who have completely lost their livelihood (zero income) due to COVID-19 pandemic in the sample, impact on income is estimated to be a fall of 58.69% and impact on wage is estimated to be a decline of 58.59%. I also discuss the recommendations made by UNWTO to mitigate the impact of COVID-19 on tourism and hospitality industry, and map Indian government's policy measures to those recommendations.

Keywords: COVID-19, Novel Coronavirus, Pandemic, Travel and Tourism, Hotels and Restaurants, Income, Wage, Difference-in-Differences