Lives versus Livelihoods during the COVID-19 Pandemic: How Testing Softens the Trade-off

Ergys Islamaj, Duong Le () and Aaditya Mattoo

No 9696, Policy Research Working Paper Series from The World Bank

Abstract: The early COVID-19 pandemic literature focused on the conflict between lives and livelihoods. But cross-country evidence reveals that across countries high mortality rates were often associated with large gross domestic product contractions. This paper shows that the presumed trade-off was associated with lockdowns as the primary instrument of containment. Early transition from lockdowns to testing-tracing-isolation-based containment softened the trade-off within countries and explains the absence of a trade-off across countries. The analysis finds that testing had positive indirect effects on growth and perhaps even positive direct effects. By allowing countries to relax shutdowns without compromising on containment, testing could have indirectly contributed to about a 0.6 percentage point boost in growth. By infusing greater confidence in people to step out and engage in economic activity, testing could have added another 0.6 percentage point to growth. As the world struggles to scale up vaccination in the face of new waves and variants, continued emphasis on testing could help limit infection without recourse to costly lockdowns.

Keywords: International Trade and Trade Rules; Pulp&Paper Industry; Food&Beverage Industry; Plastics&Rubber Industry; Business Cycles and Stabilization Policies; Common Carriers Industry; Textiles; Apparel&Leather Industry; Health Care Services Industry; Law and Justice Institutions (search for similar items in EconPapers)
Date: 2021-06-10
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Citations: View citations in EconPapers (1)

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