An Economic Model of the COVID-19 Pandemic With Young and Old Agents: Behavior, Testing and Policies

Luiz Brotherhood, Philipp Kircher, Cezar Santos () and Michele Tertilt

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper investigates the importance of the age composition in the Covid-19 pandemic. We augment a standard SIR epidemiological model with individual choices on work and non-work social distancing. Infected individuals are initially uncertain unless they are tested. We find that older individuals socially distance themselves substantially in equilibrium. Confining the old even more reduces their welfare. Confining the young extends the duration of the epidemic, with negative consequences on the old if the epidemic cannot be controlled after confinement. Testing and quarantines save lives, even if conducted just on the young, as does separation of activities by age. Combining policies can increase the welfare of both the young and the old.

Keywords: Covid-19; testing; social distancing; age-specific policies (search for similar items in EconPapers)
JEL-codes: C63 D62 E17 I10 I18 (search for similar items in EconPapers)
Pages: 57
Date: 2020-08
New Economics Papers: this item is included in nep-age, nep-hea and nep-mac
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Citations: View citations in EconPapers (31)

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https://www.crctr224.de/research/discussion-papers/archive/dp175

Related works:
Working Paper: An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies (2021)
Working Paper: An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_175v2

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