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Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu

Published online by Cambridge University Press:  02 December 2022

Sergio Correia ,
Stephan Luck  and
Emil Verner
Sergio Correia
Affiliation:
Economist at the Federal Reserve Board, 20th Street and Constitution Avenue N.W., Washington, DC, 20551. E-mail: sergio.a.correia@frb.gov.
Stephan Luck*
Affiliation:
Financial Research Economist at the Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045.
Emil Verner
Affiliation:
Assistant Professor at MIT Sloan School of Management, 100 Main Street, Cambridge, MA 02142. E-mail: everner@mit.edu.
*
E-mail: stephan.luck@ny.frb.org.
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Abstract

We study the impact of non-pharmaceutical interventions (NPIs) on mortality and economic activity across U.S. cities during the 1918 Flu Pandemic. The combination of fast and stringent NPIs reduced peak mortality by 50 percent and cumulative excess mortality by 24 to 34 percent. However, while the pandemic itself was associated with short-run economic disruptions, we find that these disruptions were similar across cities with strict and lenient NPIs. NPIs also did not worsen medium-run economic outcomes. Our findings indicate that NPIs can reduce disease transmission without further depressing economic activity, a finding also reflected in discussions in contemporary newspapers.

Type
Article
Information
The Journal of Economic History , Volume 82 , Issue 4 , December 2022 , pp. 917 - 957
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Economic History Association

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Footnotes

The authors thank seminar participants at the Federal Reserve Board, SAECEN, Virtual Finance and Economics Conference, VMACS, Banco Central de Chile, Banco Central de Reserva del Perú, Stanford GSB, University of Cologne, European Macro History, MIT, HELP Webinar, ASSA 2021 Annual Meeting, the 2022 World Economic History Congress and the World Bank, as well as Natalie Cox, Andrew Bossie, Casper Worm Hansen, Victoria Gierok, Eric Hilt (editor), Simon Jaeger, Aart Kraay, Sam Langfield, Atif Mian, Kris Mitchener, Karsten Müller, Alex Navarro, Michala Riis-Vestergaard, Ole Risager, Hugh Rockoff, Paul Schempp, François Velde, Dorte Verner, three anonymous referees for valuable comments. Outstanding research assistance was provided by Fanwen Zhu, and we thank Hayley Mink for her assistance in researching historical newspaper articles. We thank Alex Navarro and Howard Markel for sharing their city-level dated list of NPIs, as well as Casper Worm Hansen for sharing city-level public spending data.

The opinions expressed in this paper do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve Board.

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