Sectoral Effects of Social Distancing

Jean-Noël Barrot, Basile Grassi and Julien Sauvagnat
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Jean-Noël Barrot: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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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)
Date: 2020-07-10
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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:hal:wpaper:hal-02896730

DOI: 10.2139/ssrn.3569446

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