Effect of income support policy on consumption mobility amidst the global pandemic: A country-level panel data analysis

Abstract

This study examines the influence of income support policies (ISPs) in 128 countries on mobility near suppliers of essential goods during the various SARS-CoV-2 control measures in 2020 and 2021. Using Google Mobility and Oxford COVID-19 Government Response Tracker data, we employed a country fixed-effect model to assess ISP effects on mobility from complete lockdown to restriction-free periods. Results show ISPs significantly reduce mobility during semi-lockdowns but increase it during complete lockdowns. In the absence of restrictions, implementing ISPs boosts mobility around essential goods suppliers by 17%, more than in non-ISP stages. Additionally, the study reveals that the impact of ISPs is enhanced in countries with an established electronic finance infrastructure, as measured by the Inclusive Internet Index. This research provides initial evidence for the impact of ISPs on consumption mobility through different restriction measures and emphasises the crucial role of e-finance platforms in optimising government income aid policy during mobility constraint and economic recovery phases.