Che Cosa Fare: Economic Hardship in Italy and the United States During the COVID-19 Pandemic

Abstract

Ever since the start of the Covid-19 pandemic researchers have questioned if the type of policy response plans, either centralized or decentralized have influenced the economic hardship levels. Prior research suggests that centralized response plans are able to respond faster to the overall economic hardship levels that have increased during the Covid-19 pandemic. Our study examines how a centralized Italian response or decentralized American response during the Covid-19 pandemic impacted the change in economic hardship, over two time periods of August 2020 and November 2020. We investigated the effect on households of Italy and the United States respective policy response plan on four hardship measurements that include: decrease in spending, difficulty with rent, difficulty with mortgage payments, and expected future household unemployment. We hypothesized that the decentralized response of the United States would be more successful in decreasing the amount of economic hardship experienced. We believe the localized power in a decentralized policy response allows restrictions to be specified for both the economic and health state of a region. After controlling for multiple variables, we find that the United States sample was more optimistic about the future job market in the second period relative to Italy; neither country saw a change in the types of economic hardship experienced decrease broadly. However, we did see hardship character for particular types of households from August 2020 to November 2020. Overall, we find no evidence that allows us to presume either policy response from the United States or Italy as the superior option during the Covid-19 pandemic to limit economic hardship.