Economic Resilience in a Pandemic: Did COVID‐19 Policy Effects Override Industry Diversity Impacts in Australia?

Abstract

The industry diversity thesis of economic resilience to economic shocks is embedded in community development policy across Australia. The idea being that in the event of an economic shock some industries will prove more recession‐proof than others. The greater the industry diversity, the greater the likelihood of off‐setting industry effects, resulting in greater economic resilience. The COVID‐19 pandemic and the associated restrictions created a unique natural experiment to explore whether the industry diversity thesis holds true under the conditions of a global health pandemic. In this policy paper, we use JobKeeper applications as a proxy for decreased economic resilience. We explore if Australian local government areas (LGAs) with higher industry diversity had less necessity for JobKeeper. We also briefly consider if concentrations of certain industries acted as a better economic buffer to the COVID‐19 economic shock. We observe that as diversity increases, economic resilience strengthens except for Victoria (where the association is inverted). This observation has important implications for current and future policy formation and implementation across all layers of government.

Measurement and Influencing Factors of Economic Resilience over a Long Duration of COVID-19: A Case Study of the Yangtze River Delta, China

“…Some scholars have adjusted the proxy variables. For example, Angelopoulos et al utilized the location quotient method based on the number of JobKeeper applications-a Federal Government initiative from Australia-as a proxy for economic resilience [42]. Tuysuz et al measured the economic impact of the pandemic on Turkey using more extensive data on employment, exports, energy, consumption, and business closures.…”

Place‐Based Policies and Nowcasting

“…Theoretically, evolutionary economics and new economic geography explain why different regions grow at different rates. Empirically, a recent study by Angelopoulos et al (2023) explores the association between industry diversity and local area resilience during COVID‐19, discovering it was different across Australian states and territories. More generally, work by Case and Deaton (2020) discusses the social consequences of regional disparity, including community unrest, whereas Floerkemeier, Spatafora and Venables (2021) note the harmful implication it may have for economic efficiency.…”