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The Impact of the Non-essential Business Closure Policy on Covid-19 Infection Rates

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Listed:
  • Hummy Song
  • Ryan M. McKenna
  • Angela T. Chen
  • Guy David
  • Aaron Smith-McLallen

Abstract

In response to the Covid-19 pandemic, many localities instituted non-essential business closure orders, keeping individuals categorized as essential workers at the frontlines while sending their non-essential counterparts home. We examine the extent to which being designated as an essential or non-essential worker impacts one’s risk of being Covid-positive following the non-essential business closure order in Pennsylvania. We also assess the intrahousehold transmission risk experienced by their cohabiting family members and roommates. Using a difference-in-differences framework, we estimate that workers designated as essential have a 55% higher likelihood of being positive for Covid-19 than those classified as non-essential; in other words, non-essential workers experience a protective effect. While members of the health care and social assistance subsector contribute significantly to this overall effect, it is not completely driven by them. We also find evidence of intrahousehold transmission that differs in intensity by essential status. Dependents cohabiting with an essential worker have a 17% higher likelihood of being Covid-positive compared to those cohabiting with a non-essential worker. Roommates cohabiting with an essential worker experience a 38% increase in likelihood of being Covid-positive. Analysis of households with a Covid-positive member suggests that intrahousehold transmission is an important mechanism

Suggested Citation

  • Hummy Song & Ryan M. McKenna & Angela T. Chen & Guy David & Aaron Smith-McLallen, 2021. "The Impact of the Non-essential Business Closure Policy on Covid-19 Infection Rates," NBER Working Papers 28374, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28374
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    1. Couch, Kenneth A. & Fairlie, Robert W. & Xu, Huanan, 2020. "The Impacts of COVID-19 on Minority Unemployment: First Evidence from April 2020 CPS Microdata," IZA Discussion Papers 13264, Institute of Labor Economics (IZA).
    2. Forsythe, Eliza & Kahn, Lisa B. & Lange, Fabian & Wiczer, David, 2020. "Labor demand in the time of COVID-19: Evidence from vacancy postings and UI claims," Journal of Public Economics, Elsevier, vol. 189(C).
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    4. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 0. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press, vol. 36(Supplemen), pages 94-137.
    5. Ansel Schiavone, 2020. "Essentially Unemployed: Potential Implications of the COVID-19 Crisis on Wage Inequality," Working Paper Series, Department of Economics, University of Utah 2020_06, University of Utah, Department of Economics.
    6. Goolsbee, Austan & Syverson, Chad, 2021. "Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020," Journal of Public Economics, Elsevier, vol. 193(C).
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    Cited by:

    1. Gene Ambrocio, 2022. "Euro-area business confidence and COVID-19," Applied Economics, Taylor & Francis Journals, vol. 54(43), pages 4915-4929, September.
    2. Barrot, Jean-Noël & Bonelli, Maxime & Grassi, Basile & Sauvagnat, Julien, 2024. "Causal effects of closing businesses in a pandemic," Journal of Financial Economics, Elsevier, vol. 154(C).
    3. Maureen Were & Kethi Ngoka, 2022. "An assessment of the effects of COVID-19 pandemic on Kenya's trade," WIDER Working Paper Series wp-2022-8, World Institute for Development Economic Research (UNU-WIDER).
    4. repec:zbw:bofrdp:2021_004 is not listed on IDEAS
    5. Paul, Jomon A. & Wang, Xinfang & Bagchi, Aniruddha, 2024. "Lives or livelihoods: A configurational perspective of COVID-19 policies," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).
    6. Gaggero, Alessio & Mesa-Pedrazas, Ángela & Fernández-Pérez, Ángel, 2024. "Shutting down to save lives: A regression discontinuity analysis of non-essential business closure," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).
    7. Gene Ambrocio, 2022. "Euro-area business confidence and COVID-19," Applied Economics, Taylor & Francis Journals, vol. 54(43), pages 4915-4929, September.
    8. Porto, Edoardo Di & Naticchioni, Paolo & Scrutinio, Vincenzo, 2022. "Lockdown, essential sectors, and Covid-19: Lessons from Italy," Journal of Health Economics, Elsevier, vol. 81(C).

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    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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