Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia.
Proc Natl Acad Sci U S A
; 117(34): 20468-20473, 2020 08 25.
Article
in English
| MEDLINE | ID: covidwho-694655
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.
Keywords
Full text:
Available
Collection:
International databases
Database:
MEDLINE
Main subject:
Pneumonia, Viral
/
Social Isolation
/
Communicable Disease Control
/
Coronavirus Infections
/
Consumer Behavior
/
Pandemics
Type of study:
Observational study
/
Prognostic study
Limits:
Humans
Country/Region as subject:
Europa
Language:
English
Journal:
Proc Natl Acad Sci U S A
Year:
2020
Document Type:
Article
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