ANALYSIS: Governors’ shutdowns did not cause the pandemic jobs crisis

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Tue, 2021-01-26 12:38 — mike kraft

Analysis | Governors’ shutdowns did not cause the pandemic jobs crisis People started staying at home before the shutdowns were ordered, data shows. Andrew Van Dam Washington Post

The coronavirus pandemic has killed more than 416,000 Americans and recently pulled the U.S. economic recovery into reverse. Some states have shut down again to get a handle on surging caseloads. And critics have blamed those states’ governors, typically Democrats, for job losses.

But pandemic-related economic research shows the shutdowns aren’t killing jobs; the virus is.

In the first outbreaks last spring, people stayed home to avoid contracting the deadly novel coronavirus, regardless of what their governor said.

Indiana University economists Sumedha Gupta, Kosali Simon and Coady Wing reviewed more than 60 pandemic and social-distancing studies for a review article forthcoming in the Brookings Papers on Economic Activity. With the input of those economists and other experts, we’ve reviewed the basic data and some of the strongest research. Four facts emerged from the spring shutdowns.

If stay-at-home orders poisoned an otherwise healthy economy, business should have crumpled the moment they kicked in. But cellphone activity data analyzed by Gupta, Simon and Wing show a different trend: People started to stay home well before states imposed shutdowns.

In the chaotic early days of the pandemic, most people didn’t wait for official stay-at-home orders, Simon said. In every state, they stopped going to work around the weekend of March 14, as uncertainty soared, stock markets collapsed and the World Health Organization officially declared the coronavirus outbreak to be a pandemic. ...

Business collapsed so quickly in mid-March that it’s tough to disentangle correlation and causation. But several high-profile teams of economists, armed with that high-frequency data and sophisticated statistical methods, arrived at similar conclusions.

In one such study, economists Chad Syverson and Austan Goolsbee of the University of Chicago Booth School of Business used anonymized cellphone tracking data to compare traffic at businesses in shutdown areas with similar businesses in the same metro area (really, commuting zone) that weren’t shut down. ..

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