Purdue research: COVID-19 policies should vary to mitigate economic effects
The economic impact of stay-at-home orders aimed at combating the virus varied depending on your location, a Purdue professor and his research partner discovered.
Flattening the curve, as the initial shutdown orders hoped to accomplish, affected employment, earnings and spending for millions of Americans, discovered Purdue University economics professor Mario J. Crucini and Vanderbilt University coauthor Oscar O’Flaherty.
Crucini and O’Flaherty, according to Purdue, found a 4 percentage-point decrease in consumer spending and hours worked caused by stay-at-home orders mandated at the beginning of the COVID-19 pandemic.
The measures resulted in an estimated $10 billion drop in consumer spending and more than a $15 billion loss in employee earnings, Purdue stated in a release. Of the jobs lost during the shutdown, cited in their paper, “Stay-at-Home Orders in a Fiscal Union,” 1.6% were attributed to those orders.
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The professors' hypothesis: not every infected area needs the same level of mitigation – "when states have different rates of infection and partial transmission, policy choices should be different as well."
“The point our paper makes is that the choice should vary across locations based upon the epidemiological evidence both locally and more broadly,” Crucini said, in the release. “Areas with higher infection rates would have more restrictive policies than those with lower infection rates.”
Crucini, professor and Semler Chair in the Department of Economics, has studied business cycles across countries for more than three decades, the release stated, and is described as one of the leading macroeconomists in the country.
Brief summary of methods
The professors used data from the time-clock company Homebase and county-level data for every U.S. state from the nonprofit Opportunity Insights. The two then estimated labor-market and employment effects of COVID-19’s geographic spread and the role of stay-at-home orders.
Spending data from Affinity Solutions, the release detailed, was used to measure consumer spending.
Their model evaluated how policies and infection rates were different in different locations.
This article originally appeared on Lafayette Journal & Courier: COVID-19 policies should vary to mitigate economic effects
