Health vs. Wealth? Public Health Policies and the Economy During Covid-19
66 Pages Posted: 5 May 2020
Date Written: May 2020
We study the impact of non-pharmaceutical policy interventions (NPIs) like “stay-at-home” orders on the spread of infectious disease. Local policies have little impact on the economy nor on local public health. Stay-at-home is only weakly associated with slower growth of Covid-19 cases. Reductions in observed “mobility” are not associated with slower growth of Covid-19 cases. Stay-at-home is associated with lower workplace and more residential activity, but common shocks matter much more. Moreover, job losses have been no higher in US states that implemented stay-at-home during the Covid-19 pandemic than in states that did not have stay-at-home. All of these results demonstrate that the Covid-19 pandemic is a common economic and public health shock. They also show that policy spillovers and behavioral responses are important. The tradeoff between the economy and public health in a pandemic depends strongly on what is happening elsewhere. This underscores the importance of coordinated economic and public health responses.
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