A University of Rochester economist says many factors, beyond quarantines and stay-at-home orders, have caused the recent economic collapse in the United States.
Lisa Kahn, an economics professor at the University of Rochester, evaluated unemployment claims and job vacancies in states that had stay-at-home orders and states that weren’t under stay-at-home restrictions.
“While the early stay-at-home states have slightly bigger spikes in unemployment claims and job vacancies, the dramatic spikes are everywhere, regardless of a state’s individual policies,” Kahn found.
So, if stay-at-home orders didn’t drive the economic collapse, what did?
Kahn explains, “Even before we had these stay-at-home policies, people were being urged to avoid restaurants and large-group gatherings in order to avoid getting or spreading the disease. On top of that, people were nervous about whether they would be able to keep their jobs in the impending crisis. All those factors—not solely the orders keeping people at home—combined to generate the collapse in economic activity.”
Consumer confidence will be a large driver of an economic rebound in the US, and Kahn urges that “lifting state orders will not be a magic fix.”