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The economic impact of general vs. targeted lockdowns: New insights from Italian municipalities.
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- Author(s): Cseres-Gergely, Zsombor1 (AUTHOR); Kecht, Valentin2 (AUTHOR); Le Blanc, Julia1 (AUTHOR); Onorante, Luca1 (AUTHOR)
- Source:
Economic Modelling. May2024, Vol. 134, pN.PAG-N.PAG. 1p.- Subject Terms:
- Source:
- Additional Information
- Abstract: In response to COVID-19, most governments implemented either general or geographically targeted lockdowns. While the contractionary effects of general lockdowns have been well-documented, this paper is the first to contrast the economic impacts of the two approaches in a quasi-experimental setting. To this aim, we construct a high-frequency database combining unique information from mobile devices and administrative data across Italian municipalities. Using difference-in-differences approaches, our results confirm that general lockdowns considerably reduced mobility and employment, but we also find that localised measures only led to modest declines in mobility with minimal additional impact on employment. Focusing on the distributional consequences, we show that economic activity decreased less in wealthier communities with a higher capacity for telework. Moreover, short-time work schemes, serving as automatic stabilizers, predominantly benefited affluent areas. We conclude that an optimal policy mix involves targeted lockdown measures, complemented by adequate social policies and infrastructure investment. • General lockdowns during COVID reduced mobility, but strongly decreased employment. • Targeted lockdown policies, instead, led to a lower reduction in mobility and little economic cost. • Short-term work and teleworking buffered adverse consequences on the labor market. • Automatic stabilizers mostly supported high-income areas and white collar workers. • Both policies, lockdowns and automatic stabilizers, increased inequality during COVID. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Economic Modelling is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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