What Can Be Learned from the Economic Policies of Other Countries in Response to the Coronavirus Epidemic? Lessons from the First Wave

14 Pages Posted: 27 Oct 2020

See all articles by Zvi Eckstein

Zvi Eckstein

The Interdisciplinary Center (IDC); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Benjamin Bental

University of Haifa - Department of Economics

Sergei Sumkin

Reichman University - Interdisciplinary Center (IDC) Herzliyah

Date Written: October 11, 2020

Abstract

The coronavirus epidemic has instigated an economic crisis emanating from public health policies involving economic lockdown as well as behavioral reactions of workers and employers. The developed world has not seen such an extent of economic damage since at least the Second World War. We compare Israel’s battle against the first wave of the pandemic with that of other countries and show that while the infection rate in Israel was similar to that in other countries, the mortality rate was lower. Compared to Austria, by the end of May about 80 percent of the mortality gap can be ascribed to Israel’s younger population, while the remainder is due to advantages in the health-care system and some particularly Israeli behavioral modes. We find that under a conservative assumption concerning the infection rate, the cost of a life-year saved in Israel exceeds that inferred from the Israeli health-basket committee’s decisions on the inclusion of new medical technologies. Contrary to other countries, the Israeli government’s support of workers and businesses was raising uncertainty, as it was defined over shorter time spans, which were then extended from time-to-time. It seems that this served to deepen the crisis relative to that in benchmark countries that are similar to Israel in population size and human capital but characterized by higher per-capita GDP and lower poverty rates.

Suggested Citation

Eckstein, Zvi and Bental, Benjamin and Sumkin, Sergei, What Can Be Learned from the Economic Policies of Other Countries in Response to the Coronavirus Epidemic? Lessons from the First Wave (October 11, 2020). Israel Economic Review, Vol. 18, No. 1 (2020), 33-46, Available at SSRN: https://ssrn.com/abstract=3715381

Zvi Eckstein (Contact Author)

The Interdisciplinary Center (IDC) ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Benjamin Bental

University of Haifa - Department of Economics ( email )

Haifa 31905
Israel

Sergei Sumkin

Reichman University - Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 4610101
Israel

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