This paper introduces an information structure into the standard SIR model to investigate the role of targeted lockdown policies in the presence of incomplete information. By allowing for asymptomatic infected agents and symptomatic susceptible agents, such that the presence of a symptom is an imperfect indicator of an agent's health state, we solve for the optimal lockdown policies on symptomatic and non-symptomatic agents. The model is then calibrated to the UK, where we find mitigation measures have reduced the peak of the infection rate from 23.9% to 3.47%, and decreased the number of fatalities by 39.1% if a vaccine is discovered within 18 months. If a uniform lockdown policy is pursued, the costs to the economy are large with GDP falling by 18.3% in the first year. However, through conditioning lockdown policies on the presence of symptoms, these costs may be substantially reduced, with no increase in the number of fatalities.
Forsyth, O (2020), ‘Uncertainty and Lockdown in COVID-19: an Incomplete Information SIR Model‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390643
A survey experiment exposes treatment groups to four messages supporting future vaccination against COVID-19. These treatments emphasize either the risks of the virus or the safety of vaccination, to the respondent personally or to others. For a nationally representative sample, self-reported intent to vaccinate is not significantly different from the control for any message. However, there is a substantial divergence between white non-Hispanic respondents, whose response to all four treatments is close to zero, and non-white or Hispanic respondents, whose intention to vaccinate is over 50% higher in response to a message emphasizing pro-sociality and the safety of others.
Duquette, N (2020), ‘“Heard” immunity: Messages emphasizing the safety of others increase intended uptake of a COVID-19 vaccine in some groups‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390812
How does interconnectedness affect the pandemic? What are the optimal within and between states containment policies? We embed a spatial SIR model into a multi-sector quantitative trade model. We calibrate it to US states and find that interconnectedness increases the death toll by 73,200 lives. A local within-state containment policy minimizes welfare losses relative to a national policy or to one that reduces mobility between states. The optimal policy combines local within- and between-state restrictions and saves 132,200 lives. It includes a peak reduction in mobility of 33% saving approximately 40,000 lives. Different timing of policies across states is key to minimize losses. States like Arizona might have imposed too early internal lockdowns while too late travel restrictions.
Giannone, E, N Paixão and X Pang (2020), ‘The Geography of Pandemic Containment‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390644
This paper examines the effects of pandemics on income inequality, specifically those pandemics that claimed more than 100,000 lives. Given that pandemics are events that rarely occur, we have use data spanning over the last 100 years (1915-2017) and relating to four pandemics. The study includes four countries that had income inequality data covering that period. Using panel data methods â€“ Fixed Effects and Augmented Mean Group estimators â€“ we found a significant effect of these pandemics on declining income inequality. The study argues that based on the characteristics of the COVID-19 pandemic, namely that fatalities are highly concentrated in older age groups, we can neither expect a labor scarcity nor a sharp decline in productivity; however, we could expect a reduction in consumption, the possibility of savings, high unemployment rates, and high public debt ratios. The ultimate effects of COVID-19 on inequality remain unclear so far, as some of its inherent characteristics push for an increase in inequality. In contrast, others push toward a narrowing of the income gap.
Peng, B and A Sayed (2020), ‘Pandemics and Income Inequality: A Historical Review‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390645
We examine self-reported productivity of home workers during lockdown using survey data from the UK. On average, workers report being as productive as at the beginning of the year, before the pandemic. However, this average masks substantial differences across sectors, by working-from-home intensities, and by worker characteristics. Workers in industries and occupations characterized as being suitable for home work according to objective measures report higher productivity on average. Workers who have increased their intensity of working from home substantially report productivity increases, while those who previously always worked from home report productivity declines. Notable groups suffering the worst average declines in productivity include women and those in low-paying jobs. Declines in productivity are strongly associated with declines in mental well-being. Using stated reasons for productivity declines, we provide evidence of a causal effect from productivity to well-being.
Etheridge, B, L Tang and Y Wang (2020), ‘Worker Productivity during Lockdown and Working from Home: Evidence from Self-Reports‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390646
We investigate the short term labor market response to the pandemic in Italy and provide a first evaluation of the policies put in place to shield workers from the disruption of economic activity. Using administrative data on a sample of contracts active in the first quarter of 2020, we show that, before the pandemic, workers employed in non-essential activities were in majority men, younger than 35 years old, located in the North of the country and with lower levels of education. When looking at the change in hirings and separations and decomposing it by age, gender, region, type of contract (open-ended or temporary), education level, and sector (essential vs non-essential activities), we find that from the nineth week of the year, there was a pronounced drop in hirings and terminations. On the contrary, firings and quits spiked right after the nineth week, and then dropped significantly, reflecting the effects of the firing freeze and the easing of access to STW compensation schemes. We further explore separations by examining which factors predict the probability of job loss. We find that those workers that were already suffering the consequences of the previous recession (young, temporary, low-skill workers) are those at higher risk of losing their job because of COVID-19. Gender, instead, is a non-significant predictor of job loss in the aggregate.
Casarico, A and S Lattanazio (2020), ‘The Heterogeneous Effects of COVID-19 on Labor Market Flows: Evidence from Administrative Data‘, COVID Economics 52, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-52#392514_392928_390647