Overlapping Shocks and Regional Resilience: Great Recession, Covid-19 and the Role of Sectoral Composition

Abstract The COVID-19 pandemic might be considered a turning point for the economic development of several countries. Nonetheless, humans have always faced natural and man-made shocks – e.g., the Great Recession of 2008. This work focuses on the potential relationship between the economic impact of the two crises. We assume that the changed economic structure after the Great Recession might have made the regions more connected and, therefore, more vulnerable to the propagation of the pandemic. We then analyze the excess mortality associated with the Covid-19 pandemic and the trend in the sectoral composition of Italian provinces (NUTS-3 regions) in response to the Great Recession. Using different models shows that the relationship between excess mortality and the pro-trend sectoral composition (i.e., the switch toward a sectoral composition aligned with the national one) is positive and significant.