"Without public health restrictions, the random spread of the disease will inevitably hit sectors and industries that are essential for the economy to run,"
"Labour shortfalls among core workers in particular strip more value from the economy. As essential team members within this core sector drop out of the workforce, it impairs production far more than losing those in other areas of the economy." By separating the core and non-core workers, the study suggests that the economy would shrink by 30% or more without lockdown and social distancing. "By ignoring this division in the workforce, we may badly underestimate the true depth of economic damage,"
Using data from the US Bureau of Labour Statistics, the researchers then quantified the share of workers who could "reasonably keep performing occupational tasks at home": 15% of those in core sectors, and 40% of everyone else currently working—along with 30% of all non-working age people, from children to the retired. This puts a third of the entire population on lockdown.In this scenario, the infection curve is smoothed out through social distancing, and the rate of loss in economic output is around 15%, just half the level of damage if no action is taken to prevent disease spread.
The study also looked at a very strict lockdown—40% of core workers and 90% each of non-working age and everyone else—that lasts for just three months. Such a scenario simply delays the infection rates but prevents "herd immunity," creating an economic drop comparable to that of taking no action in the first place.
"The more we can target lockdown policies toward sections of the population who are not active in the labour market, or who work outside of the core sector, the greater the benefit to the economy,"
"What seems clear to us is that taking no action is unacceptable from public health perspective, and extremely risky from an economic perspective."