The Economic Impact of Social Distancing: Evidence from U.S. States During the 1918 Influenza Pandemic

33 Pages Posted: 7 Sep 2022

See all articles by Benjamin Bridgman

Benjamin Bridgman

Bureau of Economic Analysis

Ryan Greenaway-McGrevy

University of Auckland Business School

Abstract

What are the long-run economic impacts of the policy responses to control pandemics? We investigate this question by exploiting state-level data spanning one of the most consequential global pandemics in centuries, the 1918 influenza pandemic. Specifically, we use a difference-in-differences framework to examine the effects of non-pharmaceutical interventions (NPIs), ultimately finding no longer-run impact of NPIs on employment, positive or negative. Employment trends prior to 1918 suggest that World War One is an important confounding factor in analyses of the pandemic, since cities with tighter NPIs grew rapidly between 1914 and 1918. We identify new control variables that account for war production and nd that social distancing did not have long run employment impacts. The evidence underscores the importance of accounting for confounding economic and policy factors for understanding the impact of pandemics on economic outcomes.

Keywords: Pandemics, 1918 influenza, Non-pharmaceutical interventions, Employment

Suggested Citation

Bridgman, Benjamin and Greenaway-McGrevy, Ryan, The Economic Impact of Social Distancing: Evidence from U.S. States During the 1918 Influenza Pandemic. Available at SSRN: https://ssrn.com/abstract=4192554 or http://dx.doi.org/10.2139/ssrn.4192554

Benjamin Bridgman

Bureau of Economic Analysis ( email )

Ryan Greenaway-McGrevy (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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