A new study co-authored by an MIT economist shows that taking care of public health first helps generate a stronger economic rebound later.
The study used data from the 1918 flu pandemic to show that cities that acted more emphatically to limit social and civic interactions realized greater economic growth following the period of restrictions. More specifically, cities that implemented social distancing and other public health interventions just 10 days earlier than their counterparts saw a 5% relative increase in manufacturing employment after the pandemic ended, through 1923. Similarly, an extra 50 days of social distancing was worth a 6.5% increase in manufacturing employment in a given city.
“We find no evidence that cities that acted more aggressively in public health terms performed worse in economic terms,” said Emil Verner, Ph.D., a study co-author and an assistant professor in the MIT Sloan School of Management. “If anything, the cities that acted more aggressively performed better.”
The results cast doubt on the idea that there is a trade-off between addressing the effect of the virus on the one hand and economic activity on the other, as the pandemic itself causes major economic destruction, Verner added.
