Abstract
Background Governments worldwide have implemented large-scale non-pharmaceutical interventions, such as social distancing or school closures, to prevent and control the growth of the COVID-19 pandemic. These strategies, implemented with varying stringency, have imposed substantial social and economic costs to society. As some countries begin to reopen and ease mobility restrictions, lockdowns in smaller geographic areas are increasingly being considered as an attractive policy intervention to mitigate societal costs while controlling epidemic growth. However, there is a lack of empirical evidence to support these decisions.
Methods Drawing from a rich dataset of localized lockdowns in Chile, we used econometric methods to measure the reduction in local economic activity from lockdowns when applied to smaller or larger geographical areas. We measured economic activity by tax collection at the municipality-level.
Findings Results show lockdowns were associated with a 10-15% drop in local economic activity, a two-fold reduction compared to municipalities not under lockdown. A three-to-four-month lockdown had a similar effect on economic activity than the year of the 2009 great recession. We found that costs are proportional to the population under lockdown, without differences when lockdowns were measured at the municipality or city-wide levels.
Conclusions Our findings suggest that localized lockdowns have a large effect on local economic activity, but these effects are proportional to the population under lockdown. Our results suggest that epidemiological criteria should guide decisions about the optimal size of lockdown areas; the proportional effects of lockdowns on the economy seem to be unchanged by scale.
JEL codes I10, I15, I18, H2
Competing Interest Statement
The authors have declared no competing interest.
Funding Statement
This research was supported by the Agencia Nacional de Investigacion y Desarrollo (ANID) Millennium Science Initiative / Millennium Initiative for Collaborative Research on Bacterial Resistance (MICROB-R) [NCN17_081] and Millennium Nucleus for the Study of the Life Course and Vulnerability (MLIV) to EU; Fondo Nacional de Desarrollo Cientifico y Tecnologico (FONDECYT) [Grant 11191206] to RW; Centro de Desarrollo Urbano Sustentable (CEDEUS), ANID Fondo de Financiamiento de Centros de Investigacion en Areas Prioritarias (FONDAP) [Grant 15110020] to KA; and Centro de Investigacion para la Gestion Integrada del Riesgo de Desastres (CIGIDEN), ANID FONDAP [Grant 15110017] to RV.
Author Declarations
I confirm all relevant ethical guidelines have been followed, and any necessary IRB and/or ethics committee approvals have been obtained.
Yes
The details of the IRB/oversight body that provided approval or exemption for the research described are given below:
Our research uses publicly available administrative data collected by the Chilean government; data are aggregated at the municipality-level and subjects cannot be identified directly or through identifiers. It is considered exempt by the Comite Etico Cientifico of Pontificia Universidad Catolica de Chile.
All necessary patient/participant consent has been obtained and the appropriate institutional forms have been archived.
Yes
I understand that all clinical trials and any other prospective interventional studies must be registered with an ICMJE-approved registry, such as ClinicalTrials.gov. I confirm that any such study reported in the manuscript has been registered and the trial registration ID is provided (note: if posting a prospective study registered retrospectively, please provide a statement in the trial ID field explaining why the study was not registered in advance).
Yes
I have followed all appropriate research reporting guidelines and uploaded the relevant EQUATOR Network research reporting checklist(s) and other pertinent material as supplementary files, if applicable.
Yes
Footnotes
Emails: kasahi{at}uc.cl, eundurra{at}uc.cl, rodrigo.valdes{at}uc.cl, rodrigo.wagner{at}uai.cl
Data Availability
Data on COVID-19, mobility, and population are publicly available on institutional websites. The data on VAT used for this study is available from the corresponding author upon reasonable request and with permission of the tax authority.