Macro Analysis /

Covid-19 emerging markets survey: Anxious youth, impoverished wisdom

  • Young adults are suffering more anxiety, but the economic effect of Covid-19 is felt most keenly by older individuals

  • Firms of older workers seem less able to adjust to the new paradigm and see weaker top lines, working capital expansion

  • Older individuals are, however, better able to access borrower-assistance measures like loan moratoriums and subsidies

Covid-19 emerging markets survey: Anxious youth, impoverished wisdom
Rahul Shah
Rahul Shah

Head of Financials Equity Research

Ali Zaidi
Rohit Kumar
Tellimer Research
14 August 2020
Published byTellimer Research

We have previously commented on the results of our 600-person EM consumer survey from the perspective of country and income differences. Our survey also illustrates the different ways in which Covid-19 lockdowns are affecting young adults and their elders. We split our sample into adults aged 18-24 (29% of all respondents), those aged 25-34 (34%) and those aged 35 and over (37%). Key findings are summarised below.

Youths experience more anxiety, but income reductions are more likely for older generations

Our survey indicates that the physical health implications of Covid-19 have not been age-dependent; around one in six-respondents feel they have been affected in some way. We think this reflects the relatively small proportion of very old respondents in our survey (only 2% are aged over 55), who would normally be most at risk.

In contrast, nearly one-third of under-25s are experiencing Covid-19-related anxiety.

Over-35s are mentally more resilient, even though almost half of them are experiencing a reduction in income. This age-related differential is most pronounced in Brazil, India and South Africa, Indeed, almost a quarter of over-35s are struggling to meet their day-to-day expenses.

Employers of older workers are struggling to adapt

Our survey indicates that for 40% of our older respondents, their employers are experiencing lower revenues; age-related effects are most-pronounced in India, Indonesia, Mexico and South Africa. Roughly a third of such companies are struggling both to pay bills on time, and to collect receivables, with the largest differential in China. Almost 7% of these companies are on the verge of bankruptcy (with China again showing the largest age-related variation).

For our youngest respondents, these proportions are roughly halved.

We think there are two factors at work here. Firstly, older respondents are more likely to be in senior corporate positions, and hence have a better perspective of what their employer is going through. Secondly, older employees are more likely to work in companies that are not equipped to thrive in the new environment. Younger employees are more likely to work in more technologically-advanced enterprises.

To further illustrate the gap, around a quarter of our youngest respondents indicated that their employers are unaffected by Covid-19; roughly double the proportion as for our oldest respondents.

Governments’ financing support programmes are helping older individuals

Financial-sector support measures are roughly twice as likely to help older individuals. We think this reflects the greater likelihood that such individuals have borrowings eligible for assistance. Younger individuals may not yet have built up enough financial credibility (in terms of income, collateral and track record) to access credit. This issue seems to be most pronounced in South Africa.

In contrast, access to wage support programmes appears to be evenly spread across different age cohorts.