All or Nothing? Partial Business Shutdowns and COVID-19 Fatality Growth
36 Pages Posted: 5 May 2021
Date Written: April 28, 2021
Using a hand-collected database of partial business closures for all U.S. counties from March through December 2020, we examine the impact of capacity restrictions on fatality growth due to COVID-19. For the restaurant and bar sector, we find that several combinations of partial capacity restrictions are as effective as full shutdowns. Point estimates indicate that, for the average county, limiting restaurants to 25% of capacity and bars to outdoor service reduces the fatality growth six weeks ahead by approximately 41% while completely closing them reduces fatality growth by about 32%. For gyms, we find that, while full closures reduce the COVID-19 fatality growth rate, partial closures may be counterproductive relative to leaving capacity unrestricted. For salons and other personal services, we find mixed evidence that limiting them to 25% of capacity reduces fatalities. However, other constraints are either ineffective or even counterproductive.
Keywords: COVID-19, business closures, business openings
JEL Classification: I18, D60, E65
Suggested Citation: Suggested Citation