The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19

Abstract

We examine the net benefits of social distancing to slow the spread of COVID-19 in the United States. Social distancing saves lives but imposes large costs on society due to reduced economic activity. We use epidemiological and economic forecasting to perform a rapid benefit-cost analysis of controlling the COVID-19 outbreak. Assuming that social distancing measures can substantially reduce contacts among individuals, we find net benefits of about $5.2 trillion in our benchmark case. We examine the magnitude of the critical parameters that might imply negative net benefits, including the value of statistical life and the discount rate. A key unknown factor is the speed of economic recovery with and without social distancing measures in place. A series of robustness checks also highlight the key role of the value of mortality risk reductions and discounting in the analysis and point to a need for effective economic stimulus when the outbreak has passed.

Note: Funding: No external funding.

Competing interests: Authors declare no competing interests.

Keywords: COVID-19, coronavirus, social distancing, flatten the curve, benefits, costs

JEL Classification: D12, D18, D61, D78, D81, E17, E61, F13, H12, I15, I18, O11