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Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia.

ABSTRACT: This paper uses real-time transaction data from a large bank in Scandinavia to estimate the effect of social distancing laws on consumer spending in the coronavirus 2019 (COVID-19) pandemic. The analysis exploits a natural experiment to disentangle the effects of the virus and the laws aiming to contain it: Denmark and Sweden were similarly exposed to the pandemic but only Denmark imposed significant restrictions on social and economic activities. We estimate that aggregate spending dropped by around 25% (95% CI: 24 to 26%) in Sweden and, as a result of the shutdown, by 4 additional percentage points (95% CI: 3 to 5 percentage points [p.p.]) in Denmark. This suggests that most of the economic contraction is caused by the virus itself and occurs regardless of social distancing laws. The age gradient in the estimates suggests that social distancing reinforces the virus-induced drop in spending for low-health-risk individuals but attenuates it for high-risk individuals by lowering the overall prevalence of the virus in the society.

SUBMITTER: Sheridan A

PROVIDER: S-EPMC7456178 | biostudies-literature | 2020 Aug

REPOSITORIES: biostudies-literature

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Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia.

Sheridan Adam A Andersen Asger Lau AL Hansen Emil Toft ET Johannesen Niels N

Proceedings of the National Academy of Sciences of the United States of America 20200803 34

This paper uses real-time transaction data from a large bank in Scandinavia to estimate the effect of social distancing laws on consumer spending in the coronavirus 2019 (COVID-19) pandemic. The analysis exploits a natural experiment to disentangle the effects of the virus and the laws aiming to contain it: Denmark and Sweden were similarly exposed to the pandemic but only Denmark imposed significant restrictions on social and economic activities. We estimate that aggregate spending dropped by a ...[more]

PMID: 32747573

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Project description:BackgroundImplementing and lifting social distancing (LSD) is an urgent global issue during the COVID-19 pandemic, particularly when the travel ban is lifted to revive international businesses and economies. However, when and whether LSD can be considered is subject to the spread of SARS-CoV-2, the recovery rate, and the case-fatality rate. It is imperative to provide real-time assessment of three factors to guide LSD.ObjectiveA simple LSD index was developed for health decision makers to do real-time assessment of COVID-19 at the global, country, region, and community level.MethodsData on the retrospective cohort of 186 countries with three factors were retrieved from a publicly available repository from January to early July. A simple index for guiding LSD was measured by the cumulative number of COVID-19 cases and recoveries, and the case-fatality rate was envisaged. If the LSD index was less than 1, LSD can be considered. The dynamic changes of the COVID-19 pandemic were evaluated to assess whether and when health decision makers allowed for LSD and when to reimplement social distancing after resurgences of the epidemic.ResultsAfter large-scale outbreaks in a few countries before mid-March (prepandemic phase), the global weekly LSD index peaked at 4.27 in March and lasted until mid-June (pandemic phase), during which most countries were affected and needed to take various social distancing measures. Since, the value of LSD has gradually declined to 0.99 on July 5 (postpandemic phase), at which 64.7% (120/186) of countries and regions had an LSD<1 with the decile between 0 and 1 to refine risk stratification by countries. The LSD index decreased to 1 in about 115 days. In addition, we present the results of dynamic changes of the LSD index for the world and for each country and region with different time windows from January to July 5. The results of the LSD index on the resurgence of the COVID-19 epidemic in certain regions and validation by other emerging infectious diseases are presented.ConclusionsThis simple LSD index provides a quantitative assessment of whether and when to ease or implement social distancing to provide advice for health decision makers and travelers.

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Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia.

Publications

Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia.

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