Impacts of COVID-19 on Households in ASEAN Countries and Their Implications for Human Capital Development

Abstract

The outbreak of the COVID-19 virus and the resulting falls in demand due both to uncertainty and policy interventions such as lockdowns, “social distancing,” and travel restrictions are having a severe impact on Asian economies and hence on Asian households. These negative impacts come through a variety of channels, including loss of employment or reduced working hours, loss of sales and income of a household business, inability to travel to work, increased need to stay at home to look after children or sick household members, higher prices and/or lack of availability of staple items, reduced access to schooling, etc. To better understand these impacts, we carried out computer-assisted telephone interviews of households in eight ADB developing member countries: Cambodia, the Lao People’s Democratic Republic, Indonesia, Malaysia, Myanmar, the Philippines, Thailand, and Viet Nam. Our empirical results suggest that various household characteristics, including household income class (before COVID-19), household demographic factors, and COVID-19-induced factors such as having at least one person who lost their job or being located in lockdown areas, all affected the likelihood of a decline in income. In all countries, having at least one person who lost their job or had reduced working time increases the likelihood of experiencing financial difficulties by 17 percentage points. About 27% of children who stopped attending school could not fully participate in online learning programs due to weak/insufficient internet connections and a lack of digital devices. Two COVID-19-related factors—having at least one person who lost their job or had working hours reduced and experiencing financial difficulties—significantly affect the intensity of online classes taken by children in an average household.