Sectoral Effects of Social Distancing

Jean-Noel Barrot, Basile Grassi and Julien Sauvagnat
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Jean-Noel Barrot: HEC Paris

No 1371, HEC Research Papers Series from HEC Paris

Abstract: The health crisis caused by the outbreak of the COVID-19 virus has led many countries to implement drastic social distancing rules. By reducing the quantity of labor, social distancing in turn leads to a drop in output which is difficult to quantify without taking into account relationships between sectors. Starting from a standard model of production networks, we analyze the sectoral effects of the shock in the case of France. We estimate that six weeks of social distancing brings GDP down by 5.6%. Apart from sectors directly concerned by social distancing mesures, those whose value added decreases the most are upstream sectors, i.e. sectors most distant from final demand. The same exercise is carried out for other European countries, taking into account national differences in sectoral composition and propensity to telework. Finally, we analyze the economic impact of selectively phasing out social distancing by sector, region or age group.

Keywords: COVID-19; social distancing; production networks (search for similar items in EconPapers)
JEL-codes: E23 E32 H10 I10 I18 L14 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-04-15
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Sectoral Effects of Social Distancing (2021)
Working Paper: Sectoral Effects of Social Distancing (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1371

DOI: 10.2139/ssrn.3569446

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