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When and how do business shutdowns work? Evidence from Italy's first COVID‐19 wave

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  • Gabriele Ciminelli
  • Sílvia Garcia‐Mandicó

Abstract

Governments around the world have adopted unprecedented policies to deal with COVID‐19. This paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We leverage highly granular death registry data for almost 5000 Italian municipalities in a diff‐in‐diff approach that allows us to mitigate endogeneity concerns credibly. Our results, which are robust to controlling for a host of co‐factors, offer strong evidence that business shutdowns effectively curb mortality. We calculate that they may have reduced the death toll from the first wave of COVID‐19 in Italy by about 40%. Our findings also highlight that timeliness is key – by acting 1 week earlier, their effectiveness could have been increased by an additional 5%. Finally, shutdowns should be targeted. Closing service activities with a high degree of interpersonal contact saves the most lives. Shutting down production activities, while substantially reducing mobility, only has mild effects on mortality.

Suggested Citation

  • Gabriele Ciminelli & Sílvia Garcia‐Mandicó, 2022. "When and how do business shutdowns work? Evidence from Italy's first COVID‐19 wave," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1823-1843, September.
    • Handle: RePEc:wly:hlthec:v:31:y:2022:i:9:p:1823-1843
    DOI: 10.1002/hec.4502
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    1. Marcel Garz & Maiting Zhuang, 2024. "Media coverage and pandemic behavior: Evidence from Sweden," Health Economics, John Wiley & Sons, Ltd., vol. 33(6), pages 1319-1367, June.

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    More about this item

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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