Impact of COVID-19 on individual income in tourism and hospitality industry in India: A difference-in-differences approach

Abstract

This paper investigates the impact of COVID-19 (or Novel Coronavirus) pandemic on the income and wage of individuals working in tourism and hospitality industry in India. As the tourism and hospitality industry is a labor-intensive industry, the impact of COVID-19 pandemic-induced economic downturn is expected to be particularly severe here. To estimate this impact, I use a large, representative panel survey from India, and employ difference-in-differences method in this study. The estimated decline in total income ranges between 3.12 and 6.39%, and wage fall ranges between 3.21 and 5.98%, for the sample with individuals who are still earning a non-zero income from this industry. Once I include the individuals who have completely lost their livelihood (zero income) due to COVID-19 pandemic in the sample, impact on income is estimated to be a fall of 58.69% and impact on wage is estimated to be a decline of 58.59%. I also discuss the recommendations made by UNWTO to mitigate the impact of COVID-19 on tourism and hospitality industry, and map Indian government’s policy measures to those recommendations.