Firm Behavior during an Epidemic

Luiz Brotherhood and Vahagn Jerbashian

No 8478, CESifo Working Paper Series from CESifo

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 properties 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. Subsidies to sick leave reduce the cost of sick workers and raise workplace infections. Furlough policies are successful in reducing infections and saving lives. Firms delay and weaken the fight against infections during economic downturns.

Keywords: Covid-19; epidemic; firm behaviour; on-site work; policies; teleworking (search for similar items in EconPapers)
JEL-codes: C63 D20 D21 I10 I18 L23 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Firm behavior during an epidemic (2023)
Working Paper: Firm behavior during an epidemic (2023)
Working Paper: Firm behavior during an epidemic (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8478

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