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New Thinking on Covid Lockdowns: They’re Overly Blunt and Costly
Blanket business shutdowns—which the U.S. never tried before this pandemic—led to a deep recession. Economists and health experts say there may be a better way.
www.wsj.com
New Thinking on Covid Lockdowns: They’re Overly Blunt and Costly
Blanket business shutdowns—which the U.S. never tried before this pandemic—led to a deep recession. Economists and health experts say there may be a better way.
In response to the novel and deadly coronavirus, many governments deployed draconian tactics never used in modern times: severe and broad restrictions on daily activity that helped send the world into its deepest peacetime slump since the Great Depression.
The equivalent of 400 million jobs have been lost world-wide, 13 million in the U.S. alone. Global output is on track to fall 5% this year, far worse than during the financial crisis, according to the International Monetary Fund.
Despite this steep price, few policy makers felt they had a choice, seeing the economic crisis as a side effect of the health crisis. They ordered nonessential businesses closed and told people to stay home, all without the extensive analysis of benefits and risks that usually precedes a new medical treatment.
There wasn’t time to gather that sort of evidence: Faced with a poorly understood and rapidly spreading pathogen, they prioritized saving lives.
Five months later, the evidence suggests lockdowns were an overly blunt and economically costly tool. They are politically difficult to keep in place for long enough to stamp out the virus. The evidence also points to alternative strategies that could slow the spread of the epidemic at much less cost. As cases flare up throughout the U.S., some experts are urging policy makers to pursue these more targeted restrictions and interventions rather than another crippling round of lockdowns.
“We’re on the cusp of an economic catastrophe,” said James Stock, a Harvard University economist who, with Harvard epidemiologist Michael Mina and others, is modeling how to avoid a surge in deaths without a deeply damaging lockdown. “We can avoid the worst of that catastrophe by being disciplined,” Mr. Stock said......
........Dr. Mina of Harvard said the U.S. at the outset could have chosen to prioritize the economy, as Sweden did, and accept the deaths, or it could have chosen to fully prioritize health by staying locked down until new infections were so low that testing and tracing could control new outbreaks, as some northeastern states such as Rhode Island did.
Most of the U.S. did neither. The result was “a complete disaster. We’re harming the economy, waffling back and forth between what is right, what is wrong with a slow drift of companies closing their doors for good,” Dr. Mina said.
The experience of the past five months suggests the need for an alternative: Rather than lockdowns, using only those measures proven to maximize lives saved while minimizing economic and social disruption. “Emphasize the reopening of the highest economic benefit, lowest risk endeavors,” said Dr. Mina.
Social distancing policies, for instance, can take into account widely varying risks by age. The virus is especially deadly for the elderly. Nursing homes account for 0.6% of the population but 45% of Covid fatalities, says the Foundation for Research on Equal Opportunity, a conservative-leaning think tank. Better isolating those residents would have saved many lives at little economic cost, it says.
By contrast, fewer children have died this year from Covid-19 than from flu. And studies in Sweden, where most schools stayed open, and the Netherlands, where they reopened in May, found teachers at no greater risk than the overall population. This suggests reopening schools outside of hot spots, with protective measures, shouldn’t worsen the epidemic, while alleviating the toll on working parents and on children.
If schools don’t reopen until next January, McKinsey & Co. estimates, low-income children will have lost a year of education, which it says translates into 4% lower lifetime earnings.
.....Dr. Mina’s and Mr. Stock’s team has designed a “smart” reopening plan based on contact frequency and vulnerability of five demographic groups and 66 economic sectors. It assumes most businesses reopen using industry guidelines on physical distancing, hygiene and working from home; schools reopen; masks are required; and churches, indoor sports venues and bars stay closed.
They estimated in June that this would result in 335,000 fewer U.S. deaths by the end of this year than if all restrictions were immediately lifted. But they say the plan also would leave economic output 10% higher than if a second round of lockdowns were imposed.
“If you use all these measures, it leaves lots of room for the economy to reopen with a very small number of deaths,” Mr. Stock said. “Economic shutdowns are a blunt and very costly tool.”......
