Impacts of Trade Flows on Household Welfare During Covid-19 Pandemic: Evidence from OECD Countries

Abstract

While there are studies examining the relationship between COVID-19 policies and international trade, there is still limited evidence examining the relationships between international trade and household welfare during the COVID-19 pandemic. To fill this gap, this study examined the presupposed associations between international trade and household welfare in OECD countries. The study applies the fixed effects regression method to analyze panel data compiled from the UN COMTRADE and the OECD Social and Welfare Statistics databases. The findings reveal that international trade flows show significant associations with various aspects of household welfare indicators including unemployment rate, labor underutilization rate and household savings. Furthermore, the results show that the COVID-19 pandemic had significant effects on labor underutilization, household consumption, and household savings. Policy recommendations are addressed based on the key findings.