A Mexican State-level Perspective on Covid-19 and its Economic Fallout

Author/Editor:

Juan Pablo Cuesta Aguirre ; Swarnali A Hannan

Publication Date:

October 13, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Mexico has had one of the highest death tolls from Covid-19 and among the largest declines in output compared to peers. This paper utilizes data on Mexico’s thirty-two states to better understand the relationship between health and economic outcomes. For instance, did the states with worse pandemic outcomes suffer more economically? What state-level characteristics impacted health and economic outcomes? Among the findings are: individual traits such as age and certain pre-existing conditions were associated with higher illness and fatality risks. States with higher initial health expenditure and capacity on average had a lower case fatality rate. The economic fallout was widespread well beyond the direct impact of the pandemic. Tourism-heavy states were particularly badly affected, while states with larger exposures to manufacturing exports performed better. These findings support the case for adequate health spending, fiscal lifelines for hard-hit workers and sectors, and further integration into global value chains to bolster economic outcomes and resilience.

Series:

Working Paper No. 20/214

Frequency:

regular

English

Publication Date:

October 13, 2020

ISBN/ISSN:

9781513559025/1018-5941

Stock No:

WPIEA2020214

Format:

Paper

Pages:

39

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