Business Shutdowns and COVID-19 Mortality

Gabriele Ciminelli´ and Silvia Garcia-Mandicóμ | Research Series

Series Type: Working Paper

Abstract
Governments around the world have adopted unprecedented policies to deal with COVID-19. This
paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We
leverage upon highly granular death registry data for over 4,000 Italian municipalities in a diff-in-diff
approach that allows us to credibly mitigate endogeneity concerns. Our results, which are robust to
controlling for a host of co-factors, offer strong evidence that business shutdowns are very effective in
reducing mortality. We calculate that the death toll from the first wave of COVID-19 in Italy would
have been twice as high in their absence. Our findings also highlight that timeliness is key – by acting
one week earlier, the government could have reduced the death toll by an additional 25%. Finally,
our estimates suggest that shutdowns should be targeted: closing shops, bars and restaurants saves
the most lives, while shutting down manufacturing and construction activities has only mild effects.