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  5. Sectoral Effects of Social Distancing

Sectoral Effects of Social Distancing

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Abstract

The outbreak of the COVID-19 virus has led many states to take the drastic measures of social distancing. Using US executive order, occupation, and survey data, we measure the fall in labor supply due to these measures. Starting from a model of production networks, we analyze the sectoral effects of these labor shocks for the United States. We find that nonlinearities in the production network account for around half of the drop in GDP associated to the implementation of social distancing measures. The model also generates realistic dispersion in sectoral output change.

Citation

Barrot, Jean-Noël, Basile Grassi, and Julien Sauvagnat. 2021. "Sectoral Effects of Social Distancing." AEA Papers and Proceedings, 111: 277-81. DOI: 10.1257/pandp.20211108

Additional Materials

JEL Classification

  • I12 Health Behavior
  • I18 Health: Government Policy; Regulation; Public Health
  • L51 Economics of Regulation
  • L16 Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
  • E23 Macroeconomics: Production