The past few months’ job losses are mostly attributable to private sector reactions to the coronavirus rather than the government-imposed shutdowns, according to a study released Monday.
The study, circulated by the National Bureau of Economic Research, concluded that the massive spike in unemployment is “due primarily to a nationwide response to evolving epidemiological conditions” and that “individual state policies … have had a comparatively modest effect.”
The paper’s data also show, however, that the severity of state-level measures taken to tackle the epidemic is also associated with unemployment.
“It is unclear how much of the rise in unemployment was driven by shut-down policies … even without government mandates, private decisions to avoid social interactions in response to the epidemic would have reduced demand for activities like retail, air travel, hotel rooms, and on-site restaurant meals,” concluded the paper, written by economists from Indiana University and Ohio State University. The paper is a short-term assessment of the pandemic response and has not been peer-reviewed yet.
The paper found that the spike in unemployment insurance claims in the past month occurred evenly, all over the country, regardless of individual state policies or the number of coronavirus cases in a state, suggesting that the disease itself is the cause for the current economic collapse.
The economists suggest that it is unlikely that states could have avoided the huge increase in job losses by avoiding early school closures and other similar lockdown steps.
