Report: COVID Death Rates Affect State Economies | WMUK

Report: COVID Death Rates Affect State Economies

Mar 8, 2021

A hiring sign in the parking lot of a Home Depot in Cockeysville, Maryland, in February 2021
Credit Julio Cortez / AP Photo

The debate over the economic costs of fighting the COVID-19 pandemic has raged for months. But a new study by the W.E. Upjohn Institute for Employment Research in Kalamazoo suggests they're worth it.


The Institute's Brad Hershbein, a senior economist, co-wrote the report with Harry Holzer of Georgetown University. Hershbein says they found that business restrictions, like prohibitions on indoor dining in restaurants and closing theaters and gyms, do cost jobs in the short-run. But he says allowing a higher death toll by keeping them open is worse in the long-term.

"Addressing the pandemic and reducing mortality, and taking the measures to do that, is the best thing that we can do to ensure a faster recovery for jobs."

The issue has been fraught in many states with a partisan political divide. Some Republican governors and legislatures have pushed to reopen businesses as quickly as possible. States like Michigan with Democrats in the governor's mansion have tended to keep emergency pandemic orders in effect longer. Hershbein says critics of COVID-19 restrictions are correct that they cost jobs.

"But the other side that is arguing that it saves lives, they're also right. And, in the longer run, that may also benefit in having fewer people dying, allowing for a faster economic recovery down the line." Why do states with higher coronavirus death tolls have a harder time recovering the jobs they lost? Hershbein says the study suggests an answer.

"When people see more people in their state dying, and it generally gets fairly heavily on the news, they become a little more skittish about their behavior (and) they hold back on certain types of economic activity that relate to employment growth."