Kevin Bryan is an assistant professor at the Rotman School of Management. Emma Buajitti is a PhD candidate in epidemiology at McGill University. Vivek Goel is a professor at the Dalla Lana School of Public Health.
Many parts of Canada are now facing a second wave of COVID-19. As with the first wave, public-health measures remain the only means of adequately controlling community transmission of disease. These measures include individual actions, such as staying home when symptomatic, frequent hand hygiene and use of masks. They also include societal measures, such as partial or complete shutdown of activities, up to and including lockdowns. It is important that we apply lessons learned from the first wave.
We have modelled the impact of shutdowns across sectors of the economy on employment, health and mortality. The economic model includes detailed estimates of how sectors of the economy relate to each other. The interrelationship between income, unemployment and health is profound; and major economic disruptions also negatively affect people’s health. The range of employment precarity and worker characteristics across sectors means that the consequences of job losses will not be felt equally by all workers. We used models that relate a drop in income to a) the risk of becoming a frequent user of health services, and b) the risk of death. That is how we are able to estimate the consequences outlined below.
In the absence of any fiscal support for individuals, the unemployment caused by a three-month lockdown similar to the one in April would lead to more than 13,000 early deaths and cause 15,000 people to develop serious long-term health problems. Decisions to take public-health measures are not simply trade-offs between health and the economy.
Fortunately, Ottawa introduced unprecedented programs such as the Canada Emergency Response Benefit (CERB) to protect workers whose jobs were at risk. Without such initiatives, we estimate that gross domestic product would have fallen by 25 per cent and employment by 27 per cent. This is quite similar to the actual decline in hours worked in April and May.
The upshot is clear: Tailoring restrictions appropriately during a second-wave lockdown is crucial. On both economic and long-term health grounds, we should endeavour to keep open upstream sectors such as manufacturing, transportation and natural resource extraction. Why is it so important to target restrictions correctly? Restrictions on truck transportation, for example, affect not just that sector, but also the retail shops that rely on trucks to deliver goods. Restrictions on manufacturing harm the many industries that need new or repaired manufactured goods to operate. It is the overall job loss, not just the jobs directly lost in the restricted industries, that affects the economy and the long-term health of potentially unemployed workers.
If restrictions on economic activity are needed to slow the spread of COVID-19, it is best to first limit activity in downstream sectors such as retail, restaurants and bars. These sectors have less of an economic impact on other sectors. These are also higher contact settings so there is further benefit in focusing on such sectors from a public-health perspective. But the health consequences for those employed in these areas are significant, so economic support to mitigate the hardship is essential.
Benefits such as the CERB certainly mitigated the health shocks that Canadians might otherwise have suffered. However, it is not clear that these measures are sustainable indefinitely; they are costly and contribute to government debt. That debt will be a drag on future economic growth and could limit future health and social investments, both of which will have their own health consequences.
Partial or complete lockdowns should be considered when necessary as a public-health control measure. However, it is important to understand the consequences of such measures in order to target them as precisely as possible and minimize additional harms to people’s health.
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