Firm behavior during an epidemic
Vahagn Jerbashian and
Luiz Brotherhood (martinsbrotherhood@ub.edu)
Additional contact information
Luiz Brotherhood: Universitat de Barcelona, BEAT and FGV EPGE
No 2023/439, UB School of Economics Working Papers from University of Barcelona School of Economics
Abstract:
We derive a model in which firms operate in an epidemic environment and internalize infections among their employees in the workplace. The model is calibrated to fit the moments of the Covid-19 epidemic. We show that firms have incentives to fight against infections and can do so very effectively by increasing teleworking and rotating employees between on-site work, teleworking, and leave. The fight against infections in firms flattens the aggregate infections curve. Subsidies to teleworking reduce infections and save lives. Subsidies to sick leave reduce the cost of sick workers and raise workplace infections. Firms delay and weaken the fight against infections during economic downturns. We also consider the problem of a government that values output and lives. We show that the government prefers to severely restrict the epidemic by tolerating short-term output losses when it has a high valuation of life.
Keywords: Aggregate infections; firm behavior; on-site work; teleworking. (search for similar items in EconPapers)
JEL-codes: C63 D20 D21 E10 I10 L23 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/2445/192402 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 read timeout (http://hdl.handle.net/2445/192402 [302 Found]--> https://diposit.ub.edu/dspace/handle/2445/192402)
Related works:
Journal Article: Firm behavior during an epidemic (2023)
Working Paper: Firm Behavior during an Epidemic (2020)
Working Paper: Firm behavior during an epidemic (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ewp:wpaper:439web
Access Statistics for this paper
More papers in UB School of Economics Working Papers from University of Barcelona School of Economics Av. Diagonal 690, 08034 Barcelona. Contact information at EDIRC.
Bibliographic data for series maintained by University of Barcelona School of Economics (school.economics@ub.edu).