Agriculture as an unemployment buffer: the case of the tourism collapse in Andalusia

Abstract

The COVID19 pandemic has had a strong economic impact on the different productive sectors.. However, the effects have been very unevenly distributed. Some industries, most notably those related to tourism, suffered the most, whereas some others were only marginally affected, or even experienced some expansion. Focusing on the regional economy of Andalusia, this study employs a computable general equilibrium model, to investigate the structural adjustment process, triggered by the sudden drop in tourism demand, generated by the mobility restrictions introduced in 2020. The model highlights how variations in relative prices could have allowed the agricultural sector to partly compensate the macroeconomic shock, in particular by absorbing some of the additional unemployment.