JUE Insight: Were urban cowboys enough to control COVID-19? Local shelter-in-place orders and coronavirus case growth

One of the most common policy prescriptions to reduce the spread of COVID-19 has been to legally enforce social distancing through shelter-in-place orders (SIPOs). This study examines the role of localized urban SIPO policy in curbing COVID-19 cases. Specifically, we explore (i) the comparative effectiveness of county-level SIPOs in urbanized as compared to non-urbanized areas, (ii) the mechanisms through which SIPO adoption in urban counties yields COVID-related health benefits, and (iii) whether late adoption of a statewide SIPO yields health benefits beyond those achieved from early adopting counties. We exploit the unique laboratory of Texas, a state in which the early adoption of local SIPOs by densely populated counties covered almost two-thirds of the state's population prior to adoption of a statewide SIPO on April 2, 2020. Using an event study framework, we document that countywide SIPO adoption is associated with an 8 percent increase in the percent of residents who remain at home full-time and between a 13 to 19 percent decrease in foot-traffic at venues that may contribute to the spread of COVID-19 such as restaurants, bars, hotels, and entertainment venues. These social distancing effects are largest in urbanized and densely populated counties. Then, we find that in early adopting urban counties, COVID-19 case growth fell by 21 to 26 percentage points two-and-a-half weeks following adoption of a SIPO, a result robust to controls for county-level heterogeneity in COVID-19 outbreak timing, coronavirus testing, the age distribution, and political preferences. We find that approximately 90 percent of the curbed growth in COVID-19 cases in Texas came from the early adoption of SIPOs by urbanized counties, suggesting that the later statewide shelter-in-place mandate yielded relatively few health benefits.