When and how do business shutdowns work? Evidence from Italy’s first COVID-19 wave

Gabriele Ciminelli and Sílvia Garcia-Mandicó

No 1664, OECD Economics Department Working Papers from OECD Publishing

Abstract: Governments around the world have adopted unprecedented policies to deal with COVID-19. This paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We leverage highly granular death registry data for almost 5,000 Italian municipalities in a diff-in-diff approach that allows us to mitigate endogeneity concerns credibly. Our results, which are robust to controlling for a host of co-factors, offer strong evidence that business shutdowns are very effective in reducing mortality. We calculate that the death toll from the first wave of COVID-19 in Italy may have been about twice as high in their absence. Our findings also highlight that timeliness is key – by acting one week earlier, the death toll may have been reduced by up to an additional 25%. Finally, shutdowns should be targeted. Closing service activities with a high degree of interpersonal contact saves the most lives. Shutting down production activities – while substantially reducing mobility – only has mild effects on mortality.

Keywords: business shutdowns; COVID-19; Italy (search for similar items in EconPapers)
JEL-codes: E02 E25 E63 J31 J61 (search for similar items in EconPapers)
Date: 2021-04-13
New Economics Papers: this item is included in nep-eur and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1664-en

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