Hostname: page-component-788cddb947-wgjn4 Total loading time: 0 Render date: 2024-10-11T09:42:09.388Z Has data issue: false hasContentIssue false

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
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.

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
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Economic History Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

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.

References

REFERENCES

Aassve, Arnstein, Alfani, Guido, Gandolfi, Francesco, and Le Moglie, Marco. “Epidemics and Trust: The Case of the Spanish Flu.” Health Economics 30, no. 4 (2021): 840–57.CrossRefGoogle ScholarPubMed
Allcott, Hunt, Levi Boxell, Jacob Conway, Ferguson, Billy, Gentzkow, Matthew, and Goldman, Benny. “What Explains Temporal and Geographic Variation in the Early US Coronavirus Pandemic?” Working Paper, 2021. Available at SSRN https:// ssrn.com/abstract=3610422.Google Scholar
Almond, Douglas. “Is the 1918 Influenza Pandemic Over? Long-Term Effects of In Utero Influenza Exposure in the Post-1940 U.S. Population.” Journal of Political Economy 114, no. 4 (2006): 672712.CrossRefGoogle Scholar
Baek, ChaeWon, McCrory, Peter B., Messer, Todd, and Mui, Preston. “Unemployment Effects of Stay-at-Home Orders: Evidence from High Frequency Claims Data.” IRLE Working Paper No. 101-20, Berkeley, CA, July 2020.Google Scholar
Barro, Robert J. “Non-Pharmaceutical Interventions and Mortality in U.S. Cities during the Great Influenza Pandemic, 1918–1919.” NBER Working Paper No. 27049, Cambridge, MA, April 2020.Google Scholar
Barro, Robert J., Ursúa, José F., and Weng, Joanna. “The Coronavirus and the Great Influenza Pandemic: Lessons from the ‘Spanish Flu’ for the Coronavirus’s Potential Effects on Mortality and Economic Activity.” NBER Working Paper No. 26866, Cambridge, MA, March 2020.Google Scholar
Barry, John M. The Great Influenza: The Story of the Deadliest Pandemic in History. London, UK: Penguin Books, 2004.Google Scholar
Beach, Brian, Ferrie, Joseph P., and Saavedra, Martin H.. “Fetal Shock or Selection? The 1918 Influenza Pandemic and Human Capital Development.” Technical Report, NBER Working Paper No. 24725, Cambridge, MA, June 2018.Google Scholar
Berkes, Enrico, Olivier Deschenes, Ruben Gaetani, Lin, Jeffrey, and Severen, Christopher. “Lockdowns and Innovation: Evidence from the 1918 Flu Pandemic.” NBER Working Paper No. 28152, Cambridge, MA, November 2020.Google Scholar
Bootsma, Martin C. J., and Ferguson, Neil M.. “The Effect of Public Health Measures on the 1918 Influenza Pandemic in U.S. Cities.Proceedings of the National Academy of Sciences 104, no. 18 (2007): 7588–93.CrossRefGoogle ScholarPubMed
Brainerd, Elizabeth, and Siegler, Mark V.. “The Economic Effects of the 1918 Influenza Epidemic.” CEPR Discussion Papers No. 3791, London, UK, February 2003.Google Scholar
Bureau of the Census. Mortality Statistics: 1910, Volume 11. Washington, DC: GPO, 1913.Google Scholar
Bureau of the Census. Fourteenth Census of the United States, 1920, Volume 1. Washington, DC: GPO, 1922.Google Scholar
Clay, Karen, Lewis, Joshua, and Severnini, Edson. “Pollution, Infectious Disease, and Mortality: Evidence from the 1918 Spanish Influenza Pandemic.” Journal of Economic History 78, no. 4 (2018): 1179–209.CrossRefGoogle Scholar
Clay, Karen, Lewis, Joshua, and Severnini, Edson. “What Explains Cross-City Variation in Mortality during the 1918 Influenza Pandemic? Evidence from 438 U.S. Cities.” Economics & Human Biology 35 (2019): 4250.CrossRefGoogle ScholarPubMed
Collins, S. D., Frost, W. H., Gover, M., and Sydenstricker, E.. “Mortality from Influenza and Pneumonia in 50 Large Cities of the United States, 1910–1929.” Public Health Reports (1896–1970) 45, no. 39 (1930): 2277–328.CrossRefGoogle Scholar
Correia, Sergio, Luck, Stephan, and Verner, Emil. “Response to Lilley, Lilley, and Rinaldi.” Unpublished manuscript, 2020. Available at http://scorreia.com/research/pandemics-llrresponse.pdf.Google Scholar
Correia, Sergio, Luck, Stephan, and Verner, Emil. “Replication data for ‘Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu’.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-09-01. https://doi.org/10.3886/E179061V1 CrossRefGoogle Scholar
Crosby, Alfred W. America’s Forgotten Pandemic: The Influenza of 1918. Cambridge: Cambridge University Press, 2003.CrossRefGoogle Scholar
Dahl, Christian M., Hansen, Casper W., and Jensen, Peter S.. “The 1918 Epidemic and a V-Shaped Recession: Evidence from Historical Tax Records.” Scandinavian Journal of Economics 124, no. 1 (2022): 139–63.CrossRefGoogle Scholar
Demirgüç-Kunt, Asli, Lokshin, Michael, and Torre, Ivan. “The Sooner, the Better: The Early Economic Impact of Non-Pharmaceutical Interventions during the COVID-19 Pandemic.” Policy Research Working Paper No. 9257, World Bank, Washington, DC, 2020.Google Scholar
Doshi, Peter. “Trends in Recorded Influenza Mortality: United States, 1900–2004.” American Journal of Public Health 98, no. 5 (2008): 939–45.CrossRefGoogle ScholarPubMed
Galletta, Sergio, and Giommoni, Tommaso. “The Effect of the 1918 Influenza Pandemic on Income Inequality: Evidence from Italy.” Review of Economics and Statistics 104, no. 1 (2022): 187203.CrossRefGoogle Scholar
Garrett, Thomas A.Pandemic Economics: The 1918 Influenza and Its Modern-Day Implications.” Federal Reserve Bank of St. Louis Review 90 (2008): 7494.Google Scholar
Garrett, Thomas A.War and Pestilence as Labor Market Shocks: U.S. Manufacturing Wage Growth 1914–1919.” Economic Inquiry 47, no. 4 (2009): 711–25.CrossRefGoogle Scholar
Goolsbee, Austan, and Syverson, Chad. “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020.” NBER Working Paper No. 27432, Cambridge, MA, June 2020.Google Scholar
Guimbeau, Amanda, Menon, Nidhiya, and Musacchio, Aldo. “Short- and Medium-Run Health and Literacy Impacts of the 1918 Spanish Flu Pandemic in Brazil.” Economic History Review (2022), https://doi.org/10.1111/ehr.13155.CrossRefGoogle Scholar
Hatchett, Richard J., Mecher, Carter E., and Lipsitch, Marc. “Public Health Interventions and Epidemic Intensity during the 1918 Influenza Pandemic.” Proceedings of the National Academy of Sciences 104, no. 18 (2007): 7582–87.Google Scholar
Johnson, Niall P. A. S., and Juergen Mueller. “Updating the Accounts: Global Mortality of the 1918–1920 ‘Spanish’ Influenza Pandemic.” Bulletin of the History of Medicine 76, no. 1 (2002): 105–15.CrossRefGoogle Scholar
Karlsson, Martin, Nilsson, Therese, and Pichler, Stefan. “The Impact of the 1918 Spanish Flu Epidemic on Economic Performance in Sweden: An Investigation into the Consequences of an Extraordinary Mortality Shock.” Journal of Health Economics 36 (2014): 119.Google ScholarPubMed
Kellogg, Wilfred H. Influenza: A Study of Measures Adopted for the Control of the Epidemic. West Sacramento, CA: California State Printing Office, 1919.Google Scholar
Lilley, Andrew, Lilley, Matthew, and Rinaldi, Gianluca. “Public Health Interventions and Economic Growth: Revisiting the Spanish Flu Evidence.” Working Paper, 2020. Available at https://ssrn.com/abstract=3590008.Google Scholar
Markel, Howard, Lipman, Harvey B., Alexander Navarro, J., Sloan, Alexandra, Michalsen, Joesph R., Stern, Alexandra M., and Cetron, Martin S.. “Nonpharmaceutical Interventions Implemented by US Cities during the 1918–1919 Influenza Pandemic.JAMA 298, no. 6 (2007): 644–54.CrossRefGoogle ScholarPubMed
Alex, Navarro, J., and Markel, Howard. “The American Influenza Epidemic of 1918–1919: A Digital Encyclopedia.” University of Michigan Center for the History of Medicine, Ann Arbor, MI, 2016. Available online at http://www.influenzaarchive.org/.Google Scholar
Oster, Emily. “Unobservable Selection and Coefficient Stability: Theory and Evidence.” Journal of Business & Economic Statistics 37, no. 2 (2019): 187204.Google Scholar
Ott, Miles, Shaw, Shelly F., Danila, Richard N., and Lynfield, Ruth. “Lessons Learned from the 1918–1919 Influenza Pandemic in Minneapolis and St. Paul, Minnesota.” Public Health Reports 122 (2007): 803–10.CrossRefGoogle ScholarPubMed
Percoco, Marco. “Health Shocks and Human Capital Accumulation: The Case of Spanish Flu in Italian Regions.” Regional Studies 50, no. 9 (2016): 1496–508.CrossRefGoogle Scholar
San Francisco Board of Health. “Minutes, Special Meeting of the San Francisco Board of Health.” University of Michigan Center for the History of Medicine, Ann Arbor, MI, 1918. Available online at: http://hdl.handle.net/2027/spo.1990flu.0015.991.Google Scholar
Sant’Anna, Pedro H. C. “Health Policies, Economic Growth and the 1918 Spanish Flu.” Unpublished manuscript, 2020. Available online at https://pedrohcgs.github.io/posts/Spanish_flu.Google Scholar
Sheridan, Adam, Lau Andersen, Asger, Toft Hansen, Emil, and Johannesen, Niels. “Social Distancing Laws Cause Only Small Losses of Economic Activity during the COVID-19 Pandemic in Scandinavia.” Proceedings of the National Academy of Sciences 117, no. 34 (2020): 20468–73.CrossRefGoogle Scholar
Starr, Isaac. “Influenza in 1918: Recollections of the Epidemic in Philadelphia.” Annals of Internal Medicine 85, no. 4 (1976): 516–8.Google Scholar
Stokes, Andrew C., Lundberg, Dielle J., Elo, Irma T., Hempstead, Katherine, Bor, Jacob, and Preston, Samuel H.. “COVID-19 and Excess Mortality in the United States: A County-Level Analysis.” PLOS Medicine 18, no. 5 (2021): 118.CrossRefGoogle ScholarPubMed
Swanson, Joseph A., and Curran, Christopher. “The Fiscal Behavior of Municipal Governments: 1905–1930.Journal of Urban Economics 3, no. 4 (1976): 344–56.Google Scholar
Sydenstricker, Edgar. “Preliminary Statistics of the Influenza Epidemic.Public Health Reports 33, no. 52 (1918): 2305–21.CrossRefGoogle Scholar
United States Adjutant-General’s Office. Summary of Casualties among Members of the American Expeditionary Forces during the World War. Washington, DC: GPO, 1920.Google Scholar
United States Public Health Service. Public Health Reports, Volume 34 Part 1. Number 1–26 (January–June 1919) of Public Health Reports. Washington, DC: GPO, 1920.Google Scholar
Velde, François. “What Happened to the U.S. Economy during the 1918 Influenza Pandemic? A View Through High-Frequency Data.” Journal of Economic History 82, no. 1 (2022): 284326.CrossRefGoogle Scholar