Early Lockdowns Saved Jobs in Government Responses to Pandemic
Early Lockdowns Saved Jobs in Government Responses to Pandemic
(Bloomberg) -- Governments that acted quickly to restrict social interactions to safeguard the health of their citizens in the pandemic also had the most success in protecting their economies, research by Bloomberg Economics shows.
The findings imply that there’s no trade-off between saving lives and saving jobs. While some countries had a slight advantage in relying less on services, the speed and determination with which authorities imposed lockdowns played the biggest part in reducing the Covid hit to output, economists Scott Johnson and Tom Orlik found.
“Governments acting on the false hope that a little more growth could be purchased at the expense of a few more virus cases often ended up with precious few more jobs but a lot more contagion,” they said.
Saving Lives Also Saves Jobs
The idea of a health versus wealth trade-off dominated early debates on coronavirus policy making. Authoritarian regimes acted faster to halt interactions that would spread the disease, which helped them to outperform many free-market democracies.
China and Russia, both of which scored poorly on a World Bank measure of government accountability, beat the U.S., U.K., Spain, and Italy both in terms of health and economic outcomes -- although both countries face questions about the reliability of their data.
More Freedom, Worse Performance
Trust in governments was also a significant factor in their success handling the crisis, the research showed.
“From Washington, to London, Rome, Madrid, and Paris, even after the last vaccine is administered, failures of governance still need fixing,” the economists said.
©2020 Bloomberg L.P.