Research in the societal consequences of the Covid-19 Pandemic
When hit by the Covid-19 Pandemic we faced shocks to our income and our beliefs: What does this mean to our household income and retirement wealth, we thought? How will small and middle sized business cope with the international lock-down? Where do I go with all my questions and need for explanations? And what can we learn from history?
At the Department of Economics, UCPH, we search for answers to questions that arise from the Corona crisis. At this page we share the results on our Covid-19 related research - and develop and extend the page as we go along. So stay tuned for the current and future results you will find here.
Published and forthcoming
Asger Lau Andersen, Emil Toft Hansen, Adam Sheridan, and Niels Johannesen: Consumer Responses to the COVID-19 Crisis: Evidence from Bank Account Transaction Data. In Scandinavian Journal of Economics, 2021
Asger Lau Andersen, Emil Toft Hansen, Adam Sheridan, and Niels Johannesen: Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia. In PNAS August 25, 2020 117.
Björn Thor Arnarson: How a school holiday led to persistent COVID-19 outbreaks in Europe. in Scientific Reports on the 22nd of December 2021
Christian Møller Dahl, Casper Worm Hansen and Peter Sandholt Jensen. The 1918 epidemic and a V-shaped recession: Evidence from municipal income data. In Scandinavian Journal of Economics. 13 August 2021
Daphné Skandalis with Olivier Armantier, Gizem Koşar, Rachel Pomerantz, Kyle Smith, Giorgio Topa, and Wilbert van der Klaauw: How Economic Crises Affect Inflation Beliefs: Evidence from the Covid-19 Pandemic. In the Journal of Economic Behavior and Organization, September 2021.
Daphné Skandalis, Ioana Marinescu and Daniel Zhao: The Impact of the Federal Pandemic Unemployment Compensation on Job Search and Vacancy Creation. Journal of Public Economics, August 2021
Finn Tarp, Peter F. Lanjouw: Poverty, vulnerability and Covid-10: Introduction and overview. In Review of Development Economics. 11 November 2021
Frederik Plesner Lyngse, Kåre Mølbak, Robert Leo Skov, Lasse Engbo Christiansen, Laust Hvas Mortensen, Mads Albertsen, Camilla Holten Møller, Tyra Grove Krause, Morten Rasmussen, Thomas Yssing Michaelsen, Marianne Voldstedlund, Jannik Fonager, Nina Steenhard, The Danish Covid-19 Genome Consortium, and Carsten Thure Kirkeby. Increased Transmissibility of SARS-CoV-2 Lineage B.1.1.7 by Age and Viral Load: Evidence from Danish Households. Draft available at medRxiv: https://www.medrxiv.org/content/10.1101/2021.04.16.21255459v1. In Nature Communications. 13 December 2021.
Frederik Plesner Lyngse, Carsten Thure Kirkeby, Tariq Halasa, Viggo Andreasen, Robert Leo Skov, Frederik Trier Møller, Tyra Grove Krause, and Kåre Mølbak. COVID-19 Transmission Within Danish Households: A Nationwide Study from Lockdown to Reopening. Draft available at medRxiv: https://www.medrxiv.org/content/10.1101/2020.09.09.20191239v1. Accepted for publication in Eurosurveillance
Johannes Wohlfart, Tobin Hanspal, and Annika Weber: Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations. In Review of Economics and Statistics, forthcoming. Read the workingpapr in CESifo No. 8244 or CEPR Covid Economics Issue 23
Paolo Falco and Sarah Zaccagny: Promoting social distancing in a pandemic: Beyond the good intentions. PLOS ONE, 2 December 2021.
Pol Campos-Mercade, Armando N. Meier, Florian H. Schneider, Stephan Meier, Devin Pope, and Erik Wengström: Monetary incentives increase COVID-19 vaccinations. Science, 7 Oct 2021
Pol Campos-Mercade with Armando Meier, Florian Schneider, and Erik Wengström: Prosociality predicts health behaviors during the COVID-19 pandemic, Journal of Public Economics, Volume 195, 2021.
Pol Campos-Mercade with Ola Andersson, Fredrik Carlsson, Florian Schneider, and Erik Wengström: The individual welfare costs of stay-at-home policies, Scandinavian Journal of Economics, Accepted.
Pol Campos-Mercade with Ola Andersson, Armando Meier, and Erik Wengström: Anticipation of COVID-19 Vaccines Reduces Social Distancing, Journal of Health Economics, Accepted.
Sonja Settele and Cortnie Shupe: Lives or Livelihoods? Perceived Trade-offs and Policy Views. Forthcoming in the Economic Journal. Read the working paper here.
Jeanet Sinding Bentzen: In Crisis, We Pray: Religiosity and the COVID-19 Pandemic. Journal of Economic Behavior & Organization, volume 192, p 541-583, 2021.
Martín Gonzalez-Eiras and Dirk Niepelt: The political economy of early COVID-19 interventions in US states. Journal of Economic Dynamics and Control Special COVID-19 Issue, forthcoming
Young Jun Lee and Dongwoo Kima: Vaccination strategies and transmission of COVID-19: evidence across advanced countries. In Journal of Health Economics. Available online 20 January 2022
Frederik Plesner Lyngse, Kåre Mølbak, Kristina Træholt Frank, Claus Nielsen, Robert Leo Skov, and Carsten Thure Kirkeby: Association between SARS-CoV-2 Transmission Risk, Viral Load, and Age: A Nationwide Study in Danish Households. Draft available at medRxiv
Giuseppe Cavaliere, Ye Lu, Anders Rahbek, Jacob Stærk-Østergaard: Bootstrap inference for Hawkes and general point processes. Discussion paper series, Department of Economics, No 21-05.
John Rand and Henrik Hansen with Christian Estmann: Fiscal Policy Responses to COVID-19 in Danida Priority Countries in Sub-Saharan Africa. Development Economics Research Group Working Paper Series 09-2021
The COVID-19 pandemic represents an unprecedented global crisis. The task for economic policy is to help keep people alive, enterprises afloat, and households out of poverty.
In this paper Finn Tarp (with co-authors Tony Addison and Kunal Sen) discuss macroeconomic dimensions, focusing on the developing world. The paper concludes that the pandemic could reinforce the existing trend towards higher social inequality.
The discussed macroeconomic dimensions are the following: First, the pandemic affects macroeconomic stability and growth. Second, the tools of macroeconomic policy - fiscal and monetary policy together with debt management and exchange rate policy - must deal with the economic shock. Simultaneously, policy makers must find fiscal space to fund health, social protection, and livelihood support. Third, success in dealing with the virus itself will be a big determinant of macroeconomic outcomes: the size of the GDP loss, the duration of the recession, and the outcomes for the fiscal deficit and debt ratios.
Martin Gonzalez-Eiras (with Dirk Niepelt) contrasts the canonical epidemiological SIR model due to Kermack and McKendrick (1927) with more tractable alternatives that offer similar degrees of "realism" and flexibility. Martin and Dirk provide results connecting the different models which can be exploited for calibration purposes. They use the expected spread of COVID-19 in the United States to exemplify our results.
Read the research paper Tractable Epidemiological Models for Economic Analysis.
Sam Jones has published a report for UNU-WIDER (with Eva-Maria Egger, Ivan Manhique, Ricardo Santos)
In high-income countries, the primary policy response to suppress the spread of Covid-19 has been to lockdown large sections of the population for an extended period of time (at least one month). As the disease is spreading in lower income countries, similar sets of policies have been applied or are actively being considered.
However, there is growing unease that replicating policies from high income countries not just poses additional challenges outside these contexts, but it also might inflict irreparable damage on households and even foment social unrest.
In sub-Saharan Africa (SSA), in particular, many people need to leave their homes on a daily basis to access clean water or sanitation facilities, including in urban areas. These challenges are particularly stringent in poor and high-density urban neighborhoods. Also, reflecting high levels of economic informality and urban un(der)employment many families live on a hand-to-mouth basis, with limited savings and lacking in opportunities to either work from home or educate their children online.
In this context, and in the absence of data-driven approaches to estimate the feasibility of lockdown policies, in this note we quantify the extent to which socio-economic conditions are suitable to enact a strict lockdown across SSA.
Using harmonized Afrobarometer data from 2019, covering 34 countries, we construct a simple multidimensional lockdown readiness index. This reveals that just 6 per cent of households overall, or 11 per cent in urban areas, meet all the conditions for a lockdown. As might be expected, our readiness index correlates strongly with other aggregate indicators of development, including GDP per capita. However, this correlation is imperfect and there are notable outliers.
In addition, we explore the extent to which trust in political institutions and in the local community might offset some of the costs of imposing a lockdown or at least help facilitate other public health interventions.
Pol Campos-Mercade (in collaboration with Armando N. Meier, Florian H. Schneider, Erik Wengstro) finds in this new study that socially responsible behavior is crucial for slowing the spread of infectious diseases.
Economic and epidemiological models of disease transmission abstract from prosocial motivations as a driver of behaviors that impact the health of others. In an incentivized study, Pol and his peers show that a large majority of people are very reluctant to put others at risk for their personal beneﬁt.
The experimental measure of prosociality predicts health behaviors during the COVID-19 pandemic, measured in a separate and ostensibly unrelated study with the same people. Prosocial individuals are more likely to follow physical distancing guidelines, stay home when sick, and buy face masks.
The research group also ﬁnds that prosociality measured two years before the pandemic predicts health behaviors during the pandemic. The ﬁndings indicate that prosociality is a stable, long-term predictor of policy-relevant behaviors, suggesting that the impact of policies on a population may depend on the degree of prosociality.
Sonja Settele and Cortnie Shupe study the role of cost-benefit considerations in driving public demand for non-pharmaceutical interventions (NPIs) during the Covid-19 pandemic.
In a large-scale online survey experiment with a representative sample of the US population, they introduce exogenous variation in the perceived economic costs of shutdown measures by informing a random half of our sample about relevant research evidence.
Sonja and Courtnie find that a one standard deviation decrease in perceived economic costs (increase in perceived health benefits) of shutdown measures increases the preferred shutdown length by 13 (11) days. These effects are substantial, corresponding to two times the effect of having a Covid at-risk condition and to approximately half of the Democrat-Republican difference in demand for NPIs.
Individuals with an acute and immediate personal exposure to the crisis, either in the form of health at-risk conditions or job loss, however, are less responsive to cost-benefit considerations. Along the political dimension, while we find substantial level differences in support for NPIs, this support is highly elastic to cost-benefit considerations regardless of individual political orientation.
Our results provide insights for policy makers into the mechanisms determining public acceptance of pandemic response measures.
Sonja and Cortnie's results are forthcoming in the Economic Journal. Read the working paper here.
Paolo Falco and Sarah Zaccagni
Reminders to promote social distancing have been ubiquitous throughout the COVID-19 crisis, but little is known about their effectiveness. Existing studies find positive impacts on intentions to comply, but no evidence exists of actual behavioral change.
We conduct a randomised controlled trial with a large representative sample of Danish residents, who receive different versions of are minder to stay home as much as possible at the height of the crisis. We are the first to measure impacts on both intentions to comply and on realised actions in the following days.
We find that the reminder significantly increases people’s intentions to stay home when it emphasizes the consequences of non-compliance for the respondent or his/her family, while it has not impact when the emphasis is on other people or the country as a whole.
Changes in intentions, however, translate into weaker changes in actions that are not statistically significant. This is consistent with the existence of important intention-to-action gaps.
Only people who are in relatively poor health are significantly more likely to stay home after receiving the reminder with an emphasis on personal and family risks. This shows that while reminders may be useful to protect groups at risk by increasing their own compliance with social distancing, such a tool is unable to change the behavior of those who face limited personal risks but could spread the disease.
Niels Bohr Professor Morten Bennedsen has received a grant from the Independent Research Foundation Denmark to investigate the consequences of the corona crisis on Danish firms. We expect the first results and public report i June.
The project objectives is this:
Beyond being a major health crisis, the corona crisis is the largest negative shock we have seen to business the last 100 years. We map the consequence through a 2 part survey send out to all active firms in Denmark w 3+ employees. We map impact on employment, estimates of business survival depending on the length of the crisis, business liquidity, financial challenges, and the use and effect of government programs aimed at supporting business during the crisis.
Our 1st contribution is to map these consequences and provide a platform to which we can understand how severe the situation is and what business can do to minimize the cost.
Our 2nd contribution is to combine the survey with register data to investigate what characterize resilient firms: How firm organization, firm type, management practice and leadership style interact with business performance during crisis.
Our 3rd contribution is to evaluate the use and effectiveness of government programs to help business during crisis.Beyond being a major health crisis, the corona crisis is the largest negative shock we have seen to business the last 100 years.
Martín Gonzalez-Eiras (with Dirk Niepelt)
We embed a lockdown choice in a simplified epidemiological model and derive formulas for the optimal lockdown intensity and duration. The optimal policy reflects the rate of time preference, epidemiological factors, the hazard rate of vaccine discovery, learning effects in the health care sector, and the severity of output losses due to a lockdown. In our baseline specification a Covid-19 shock as currently experienced by the US optimally triggers a reduction in economic activity by two thirds, for about 50 days, or approximately 9.5 percent of annual GDP.
Asger Lau Andersen, Emil Toft Hansen, Niels Johannesen, and Adam Sheridan
This paper uses transaction-level customer data from the largest bank in Denmark to estimate consumer responses to the COVID-19 pandemic and the partial shutdown of the economy. We find that aggregate card spending has dropped sharply by around 25% following the shutdown. The drop is mostly concentrated on goods and services whose supply is directly restricted by the shutdown, suggesting a limited role for spillovers to non-restricted sectors through demand in the short term. The spending drop is somewhat larger for individuals more exposed to the economic risks and health risks introduced by the COVID-19 crisis; however, pre-crisis spending shares in the restricted sectors is a much stronger correlate of spending responses.
The research is published in PNAS:
“Social distancing laws cause only small losses of economic activity during the COVID-19 pandemic in Scandinavia“
(Niels, Johannesen, Adam Sheridan, Asger Lau Andersen and Emil Toft Hansen)
Proceedings of the National Academy of Sciences (PNAS), 2020
Casper Worm Hansen (with Christian Møller Dahl and Peter Sandholt Jensen)
We combine high-quality vital statistics data with annual income data at the municipality level to study the economic aftermath of the 1918-inuenza epidemic in Denmark. Controlling for pre-epidemic trends, we find that more severely affected municipalities experienced short-run declines in income, suggesting that the epidemic led to a V-shaped recession, with relatively moderate, negative effects and a full recovery after 2-3 years. Month-byindustry unemployment data shows that unemployment rates were high during the epidemic, but decreased again only a couple of months after it receded. This evidence also indicates that part of the economic downturn in 1918 predates the epidemic.
In times of crisis, humans have a tendency to turn to religion for stress relief and explanation. The 2020 COVID-19 pandemic is no exception: The demand for religion has risen
dramatically since the onset of the pandemic with political leaders and self-organized groups urging their fellow citizens to pray. I document that Google searches on prayer has skyrocketed during the month of March 2020 when the COVID-19 went global. Using daily data on internet searches for prayer for 75 countries, I find that search intensity for prayer doubles for every 80,000 new registered cases of COVID-19. The results can be understood as religious coping: We pray to cope with adversity.
Johannes Wohlfart (with Tobin Hanspal, Annika Weber, )
In early April 2020 we conducted a survey on a representative sample of more than 8,000 US households to study the effect of the coronavirus crisis on household income and retirement wealth, households’ expectations about the recovery, and the impact of the shock on individuals’ economic choices. Wealth shocks are large across the population, but more pronounced for middle-age households and those higher in the wealth and income distributions. This contrasts with income shocks, which are stronger for younger households and those in lower income and wealth quintiles. Expectations about household spending are affected by income shocks, but not by financial wealth shocks. Both wealth and income shocks are associated with upward adjustments in expectations about household debt, desired working hours, and retirement age. Finally, respondents expect the recovery of the stock market to occur more quickly than for previous stock market crashes and beliefs on the duration are strongly correlated with expectations about own wealth, debt, and labor market activity.
The paper is forthcoming in Review of Economics and Statistics. Read the working paper.
|Asger Lau Andersen||Associate Professor||+4535333133|
|Casper Worm Hansen||Associate Professor||+4535336978|
|Edward Samuel Jones||Associate Professor||+4535323038|
|Jeanet Sinding Bentzen||Associate Professor||+4500000000|
|Johannes Wohlfart||Assistant Professor - Tenure Track||+4535332061|
|Paolo Falco||Assistant Professor - Tenure Track||+4535334817|
Vaccineskepsis skyldes informationsulighed og mistillid til myndigheder2022.02.01
Vaccination strategies and transmission of COVID-19: : evidence across advanced countries2022.01.20
Frederik Lyngse in WHO Technical Advisory Group2022.01.06
Estimation of covid-19 transmission rates2021.12.14
Promoting social distancing in a pandemic: Beyond good intentions2021.12.07
Vaccine ‘pocket money’ is controversial - but it works2021.10.07
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EPRN konference, 2020
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Webinar: model-based evaluation of scenarios for reopening Denmark