DP14744 The lockdown effect: A counterfactual for Sweden

Author(s): Benjamin Born, Alexander Dietrich, Gernot Müller
Publication Date: May 2020
Date Revised: March 2021
Keyword(s): counterfactual, COVID-19, Google mobility reports, lockdown, Output loss, synthetic control unit, voluntary social restraint
JEL(s): C4, E0, I18
Programme Areas: International Macroeconomics and Finance, Monetary Economics and Fluctuations
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14744

While most countries imposed a lockdown in response to the first wave of COVID-19 infections, Sweden did not. To quantify the lockdown effect, we approximate a counterfactual lockdown scenario for Sweden through the outcome in a synthetic control unit. We find, first, that a 9-week lockdown in the first half of 2020 would have reduced infections and deaths by about 75% and 38%, respectively. Second, the lockdown effect starts to materialize with a delay of 3-4 weeks only. Third, the actual adjustment of mobility patterns in Sweden suggests there has been substantial voluntary social restraint, although the adjustment was less strong than under the lockdown scenario. Lastly, we find that a lockdown would not have caused much additional output loss.