Researchers at the California Academy of Sciences, along with a collaborator at Denison University, have developed an innovative new model to assess how California’s economy can fare without economic shutdowns to slow the spread of the coronavirus pandemic. Their preliminary findings – published today in frontiers in physics – revealed that under a “business as usual” approach where there were no business closings, California’s economy was generally better off than it actually was. However, the economic effects were still large and unevenly distributed, and there could have been a significant increase in deaths and hospitalizations from COVID-19 exacerbating existing inequalities.
“There is a common assumption that the economic emergency was caused solely by how we handled the pandemic with uneven business closures,” says senior author and Academy Curator of Geology Peter Rupnarin, PhD. “So we asked, what if we hadn’t shut down the economy? In the end, we found that the economic consequences, while diminished, would still have been severe and uneven across the state.”
The model allows comparisons of pandemic impacts across regions and economic sectors within California, providing public health experts with location-specific socioeconomic data to develop more effective mitigation and vaccination strategies.
“When you have a pandemic, there will be unavoidable economic and social consequences,” says Rubnarin. “In order to create equitable policies and mitigation strategies that balance these consequences, we need tools that help us understand the diverse impacts. This model is now one of those tools.”
California “business as usual” case study
Since the beginning of the pandemic, there has been much debate about how to suppress the virus while sparing the economy. Citing record unemployment levels in the United States, some have argued that keeping the economy open — despite the risks of worse health outcomes — would have done less societal harm than the widespread business closings that were implemented. This study shows that may not be the case.
“Earlier, less robust modeling studies included biases that prioritized the market over people’s health,” says Rubnarin. “We show that this is a dangerous, simplistic misdivision, and that the economy would have been affected even without the lockdown due to the massive increase in the death rate.”
In fact, without any mitigation measures, the researchers estimated that by March 2021, California’s unemployment rate would have reached 5.43% compared to 3.9% before the pandemic. In fact, employment figures as of March 2021 showed unemployment at 8.4%. However, the lower unemployment rate under the “business as usual” approach would have come at a huge public health price. Without shutting down the economy, the model estimated nearly 170,000 deaths by March 2021 of workers alone — more than three times California’s actual cumulative COVID-19 deaths over that period.
Although the overall economy would have improved, not every region would have escaped economic hardship under the “business as usual” approach. Of the 10 regions studied, two (Fresno and Stockton-Lodi) had higher unemployment than they actually did because they have smaller, less diversified economies, generally older populations, and relatively large agricultural sectors. These economies could have been disproportionately affected by death and illness from COVID than they already have been, which could lead to more severe cascading unemployment elsewhere.
“These findings suggest that initial mitigation responses, such as closing businesses, protect these most vulnerable economies from incurring greater job losses by preventing the spread of COVID-19,” says Abarca. “Our findings also raise important questions about who benefits most from our economy under normal circumstances, and how that economy can be improved to better serve those who have been hit hardest by this pandemic and future crises.”
A systems-wide look reveals subtle solutions
Although a paleontologist might seem like an unusual candidate to lead a study on the economic impacts of a pandemic, Rubnarin sees strong parallels between this work and his typical research analyzing how stressors such as mass extinction events affected prehistoric ecosystems.
“From the galaxies to the cells in your body, complex systems share certain traits,” says Rubnarin. One of these common features is highly interdependent: what happens in one part of the system manifests itself in other parts. For a prehistoric environment, this could mean that an asteroid wipes out plant life bringing about the collapse of the reign of the dinosaurs. For the economy, this could mean that worker deaths due to COVID in the agricultural sector lead to a slowdown in food production and thus negative impacts on the restaurant industry. These types of cascading effects on a system were analyzed by the research team in this study.
Using data from the US Bureau of Economic Analysis, the researchers determined the strength of the connections between different economic sectors in different regions across California, allowing them to measure each region’s susceptibility to negative cascading effects like those from the pandemic. For public health experts and policymakers working to combat COVID-19 and future pandemics while minimizing economic impacts, this provides a foundation for building more robust mitigation and vaccination responses that target the most vulnerable areas.
“There are clear priorities for vaccination based on age and healthcare workers,” says Rubnarin. “But beyond that, our prioritization seems to happen at random. Using our model, we can identify workers who are at greatest risk of unemployment during a pandemic based on which sector they are in and which sectors are most important to preventing economic cascade. In other words, which industries should Get back to work sooner for the best health and economic outcomes.”
To ensure that decision makers can use the model, study co-author Joseph Rusak designed an interactive data visualization tool that enables experts to explore the data used in the study, as well as simulate different economic scenarios based on contagion, or R.0of the new variants COVID-19.
“It is important that we begin to apply complex system theory toward solutions to the pandemic,” says Assistant Curator at the Academy and co-author of the study, Marisela Abarca. “The value of this model is that it shows government leaders that there are more nuanced approaches available. We want to balance both the health of the economy and the health of the people involved in it so we can move away from an either/or narrative.”