Pathways to recovery from COVID-19: characterizing input-output linkages of a targeted sector.

Abstract

At present, the world is facing an unprecedented employment challenge due to the COVID-19 pandemic. International Labor Organization of the United Nations expects the largest amount of youth unemployment at the global level to take place in manufacturing, real estate, wholesale, and accommodation sectors. This paper has two objectives. The first is to introduce a graph-theoretic method for identifying upstream and downstream pathways of a targeted sector and characterize them in ways that help respond to and recovery from the adverse effects of the COVID-19 pandemic. The second is to apply this method in the context of China, Japan, India, Russia, Germany, Turkey, UK and USA, which together account for about 60 percent of the world GDP. Based on the analysis of most recent input-output data from 2015, manufacturing sector is found to be top priority sector to be targeted in all the eight countries, followed by real estate and wholesale sectors, and these sectors should be coupled with isolated communities of sectors to capture external employment and growth effects. Characterizing the critical pre-COVID-19 linkages of a targeted sector should inform policy makers regarding the design of employment and growth strategies to recover from the pandemic.