This paper examines the compliance of local Chinese officials with the zero-Covid policy during the COVID-19 pandemic. By analyzing biographical data of political elites and a prefecture-day level dataset on risk levels – an index reflecting the intensity of epidemic prevention and control under the zero-Covid framework – we find that promotion incentives of prefecture leaders significantly influence their response time to COVID-19 outbreaks. Our empirical findings indicate that leaders with higher promotion prospects tend to overreact to emerging cases and maintain zero-Covid measures for extended periods even after outbreaks are under control. However, the intensity of zero-Covid measures can vary substantially among officials with higher promotion incentives.
We propose a theoretical model based on a multi-task agency framework to explain these phenomena. In this model, officials must balance crisis control and routine performance tasks. We categorize officials into two groups: those facing immediate promotion evaluations and those without evaluations or with distant deadlines. Furthermore, we consider the variation in resources available to local governors for crisis resolution. Our model predicts that officials with imminent promotion evaluations will act more radically in complying with the zero-Covid policy by escalating risk levels, which are visible to the central government but may not reflect stringent containment measu res. Among these high-incentive officials, governors with ample fiscal or governance resources will prioritize both economic growth and pandemic control, while those governing less developed prefectures will favor a “one size fits all” approach, implementing regional lockdowns to halt virus spread. Our empirical findings support and validate these theoretical predictions.
In our ongoing analysis, we anticipate uncovering how connections with provincial leaders and announcements of revised zero-Covid guidelines (as well as lockdown events in large cities) also impact prefecture leaders' pandemic response. Additionally, we are investigating the relationship between local political elites' promotion outcomes and their anti-pandemic performance.
This paper presents the first investigation into the economic consequences of the zero-COVID policy implemented by the Chinese government as a pilot experiment in using big data for country management from 2020 to 2022. Our study includes an original county-daily panel data set on the COVID risk level issued by the State Council of the PRC. To measure economic activities, we use satellite data on night lights and PM2.5, and geographical data on mobility index. Our findings indicate that the zero-COVID policy did not result in significant economic loss in 2021. However, in 2022, when the Omicron variant emerged, stricter zero-COVID policy led to a 30% decline in mobility, a 1.17% decrease in PM2.5 and a 7.7% reduction in night lights. Based on our calculations, China experienced a 3.9% loss in GDP as a consequence of the implementation of the zero-COVID policy in 2022.
The outbreaks of coronavirus disease 2019 (COVID-19) and subsequent lockdowns and school closures have caused varying degrees of academic disruptions for children. This paper exploits variation in the duration that cities were classified as medium- or high-risk areas to identify the effects of China’s zero-COVID policy on the academic outcomes of children aged 6 to 15. Employing a difference-in-differences methodology and focusing on within-student changes in academic performance between pre- and early stages of the pandemic, we uncover robust evidence that the stringency of the zero-COVID policy is associated with significantly better mathematics performance for boys, while having no effects on girls. Mechanism analyses show that parental discipline is crucial for children’s academic performance during COVID-19. Boys benefit more from parental discipline than girls, especially those with weaker noncognitive skills. In particular, a conscientious mother, coupled with an amiable father, seems to bring the best outcomes for the child.
Evidences have been found in literature that the use of new technology could help people in developing countries form and enhance their risk-sharing networks and become more resilient to shocks. Despite the quick adaption of mobile payment in China during recent years and the existence of a large group of migrant workers, a systematical analysis on whether the mobile payment innovation in China imposes an impact on the risk-sharing within the informal network among rural households is currently absent. This research aims to utilize the Covid-19 pandemic as an exogenous shock to investigate the rural household risk-sharing behaviors and the impact of the transaction cost reduction due to mobile payment in rural China. Our work could provide further insights into how mobile payment helps households and develop the economy in a more confounding way.
An autocrat equipped with the absolute power dominates over the subordinates, meanwhile a class of aristocrats usually existed in any autocratic regime. This paper considers a principal-agent model with no third-party enforcement. An innovative setting that allows the principal to design the agents’ expected vacancy value explains how granting privilege to the agents could optimize the principal’s expected profit.
We study the effect of China’s anti-contagious policy on labor market outcomes in 2020. By exploiting variation in the duration of the zero-Covid policy in China, which is triggered by the outbreak of new cases of COVID-19 in a 14-day observation window, we find that a 10% increase (3.7 days in average) in the duration of the zero-Covid policy caused the probability of unemployment to increase by around 0.1. Unlike most large economies that suffered a serious health shock from the COVID-19 pandemic, China effectively contained the scale and the spread of the initial outbreak in 2020. This provides a special empirical setting to examine the policy effect of anti-contagious policies, and we show that the disruption on the labor market majorly comes from the zero-Covid containment measures, while health shocks are trivial on the labor market outcomes. Moreover, the zero-Covid policy decreases the labor income and hours worked for employed individuals, and the policy effect is heterogeneous across demographic groups. We also examined the policy effect during different phases of the pandemic, and the results imply that the stringent clearance during the first stage of the pandemic (ended by Feb 17, 2020) caused the negative impacts on the labor outcomes, while the subsequent dynamic clearance strategy did not generate significant disruption on the labor market outcomes in 2020.