Governments around the world have used a variety of non-pharmaceutical interventions to control the spread of COVID-19.  These include lockdowns of varying strength and duration; efforts to test, track and isolate potential carriers of disease; and the use of masks and other social distancing policies. Starting late April, some countries gradually lifted or eased lockdown measures. But there are also examples of “re-locking” as COVID-19 cases re-emerge.

A key question for policy makers everywhere is: Which control measures have effects that merit the costs involved? Or put another way, what types and combinations of measures are effective in containing the spread of COVID-19 with minimal negative economic impact? Our ongoing empirical research has provided useful insights to help answer these questions.

Specifically, we examine the relationship between control measures and COVID-19 transmission rates (as captured by its reproduction rate), as well as the impact of these measures on economic activity.

First, we find that the reduction of COVID-19 spread is strongly associated with increases in time spent at home. Specifically, our estimates suggest that on average a 10% increase in time at home could lead to around 30% of the transmission rate reduction needed to contain the pandemic.

However, this relationship is weaker when household size is large and especially so in developing countries.  Quantitatively, compared to another country with one fewer person per household, the association between changes in time at home and reductions in the transmission rate are 15% smaller on average. This suggests that lockdown orders that aim to suppress the spread of COVID-19 by restricting the mobility of people are less likely to be effective in communities with high density and large households. Such a relationship may be expected, since larger households have a larger share of contacts at home, so that lockdown leads to relatively lower reductions in contact rates.

In addition, lockdowns in emerging economies might not be as effective in controlling people’s movement in the first place. Our analysis shows that during the peak lockdown period, people stayed at home systematically less in developing economies given the same lockdown stringency. One potential underlying reason is that people in emerging economies simply cannot afford to stay at home because these places have lower share of labor force that can work from home, as shown by a recent study. Lockdowns involving workplace and school closures lead to large reductions in economic activity, resulting in very high costs, and workplace closures aren’t even very effective at controlling transmission.

 

Second, an extensive system of tracing, and targeted measures, such as bans on gatherings, provides a far more economically viable basis for controlling the spread of COVID-19. These policies are found to be both effective in slowing the spread but also associated with little to no economic downturns.  In particular, implementation of mass testing leads to around 10% of the reduction in transmission needed to contain the epidemic.  The case of masks is similar, and we find that these types of measures have no significant impact on GDP.

Third, our research indicates an important role for incentives.  For interventions such as testing, contact tracing and isolation to be effective in controlling disease spread, people must truthfully disclose information about their symptoms and contact patterns, and isolate as necessary.  If the reporting of symptoms by a worker has the potential to lead to loss of income, however, the effectiveness of the testing-tracing-isolation strategy comes into question. 

This scenario is likely to play out when workers do not have access to paid sick leave benefits. Especially since a large share of COVID-19 cases involves mild symptoms, affected workers may well show up for work to avoid income loss, and in the process spread disease and simultaneously dampen the effectiveness of contact tracing systems, whereby people who have come in recent contact with a COVID-19 positive person are identified and requested to isolate.

 

In this context, a paid sick leave policy can be an effective tool for directly controlling the disease, and also serve as a strong complement to contact tracing efforts. The latter is affirmed in our research by the finding that, among all control measures, contact tracing, when combined with paid sick leave, has the largest contribution to reducing COVID-19 spread. Controlling for other factors, implementing contract tracing in economies with paid sick leave in place can offer around 35% of the transmission reduction needed to control the epidemic, which is an important contribution.

Overall, our results suggest that when second or third waves hit, control measures can be better targeted to those that are most cost-effective. Specifically, tools such as workplace closures may be too blunt to deal with the spread of COVID-19, and they also take a huge toll on the economy.

Countries would be better off expanding not only their capacity to test, trace, and isolate potential carriers of COVID-19 but also their paid sick leave benefits. In particular, efforts should be made to provide the self-employed and temporary workers with sickness benefits for the entire duration of the pandemic.  Doing so would not only serve as a measure of social protection, it would also be an important tool to fight the pandemic.