Analyzing the economic effects of lockdowns and distancing
In the recent paper "Fear of COVID and non pharmaceutical interventions: An analysis of their economic impact among 29 advanced OECD countries," (published by CEPR Press) Colombe Ladreit (Ph.D. candidate, Bocconi University, Department of Social and Political Sciences) and Laurence Boone (chief economist, Organisation for Economic Cooperation and Development OECD), estimate the effects of lockdowns and voluntary social distancing on the economy of advanced OECD countries, using Google mobility data as a proxy for economic activity.
On average, lockdowns explain the biggest share of the decrease in mobility, both during the first wave (February 15, 2020, to June 30, 2020) and the second wave (September 1, 2020, to January 15, 2021). Yet, voluntary social distancing gained explanatory power during the second wave as lockdowns were less stringent and, potentially, as people became more aware of the risks.
Looking at the type of government restrictions, the closure of workplaces and stay-at-home requirements had the most effect on the decrease in mobility during the first wave of COVID. The restrictions on public transports, school closures and restrictions on gatherings also had an important effect but, during the second wave, stay-at-home orders no longer had a significant effect on mobility. Workplace closures remain the most effective measure.
"A more detailed analysis of countries shows that, during the first wave, the effect of government restrictions on mobility was stronger in France, Spain and the United Kingdom than in the average of advanced OECD countries," explains Ladreit. A specific case is Italy where, according to her, the country stands out in the first wave as "the only one in which government restrictions and voluntary social distancing played an equally significant role in the decrease in mobility."
During the second wave, countries opted for less homogeneous measures: France, Germany and Italy have implemented measures, but France responded to the death toll with a lower elasticity than one observed in the first wave. Germany, on the other hand, adjusted its mobility to the restrictions more than in the first wave and, in Italy, the effect of daily deaths is less important during the second wave, maybe because the climate of anxiety that was present eased. Lastly, Spain and the United Kingdom decide on different solutions based on numerous and different regional restrictions and an overall measurement became less precise.
More information:
The paper: cepr.org/sites/default/files/CovidEconomics73.pdf
Provided by Bocconi University