The US should follow Sweden's approach to combating COVID-19

Many governors are refusing to lift their COVID-19 shelter-in-place decrees until long lists of conditions are met. They have phrased their recalcitrance in the language of science. As California’s Gavin Newsom put it: "Science, not politics must be the guide…. We can't get ahead of ourselves .... I don't want to make a political decision. That puts people's lives at risk."  

As a matter of science, the governors are wrong. They assume that they are making a tradeoff of a short-term reduction in employment for a long-term reduction in age-specific mortality. They are actually making a tradeoff of a short-term reduction in COVID-19 deaths for a long-term increase in age-specific mortality for working people and their families.   

The governors have made this error in judgement because they are not taking into account basic facts about COVID-19 and about the mortality risks from mass layoffs and poverty.

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Let us start with the facts about COVID-19. First, it is highly contagious. Second, a very large percentage of those infected are asymptomatic. Third, precisely because it is highly contagious and many cases are asymptomatic, infection will continue to spread until a vaccine becomes available or herd immunity is reached. Government actions, such as lockdowns, contact tracing, mandatory social distancing and the like, will not influence the total number of people who are ultimately infected; they only influence how many people have an active infection at a given point in time. All of these actions “flatten the curve,” but they do not affect the area under the curve.

Fourth, no one knows the infection mortality rate from COVID-19. But there is broad agreement that the number is substantially lower than the 3.4 percent initially published by the World Health Organization, which only included symptomatic cases in the numerator. Indeed, the higher the percentage of asymptomatic cases, the lower must be the infection mortality rate. 

Fifth, and finally, the mortality risk facing a young person from COVID-19 is minuscule compared to the mortality risk faced by an old person. The Center for Disease Control and Prevention’s most recent report shows that people over the age of 65 account for only 16 percent of the total U.S. population, but they comprise 79 percent of all U.S. COVID-19 deaths. People under the age of 35 account for close to half of the total U.S. population, but comprise less than one percent of all U.S. COVID-19 deaths.

Let us now add a few basic facts from research in economics about the mortality effects of unemployment and poverty. First, as the research of Daniel Sullivan and Till von Wachter in the Quarterly Journal of Economics shows, mass layoffs during recessions increase both the short-term and long-term age-specific mortality risks of laid-off workers. For middle-aged male workers, mortality rates in the year after being laid off are 50 percent to 100 percent higher than they would have been otherwise. Second, a large body of research shows that the loss of employment in middle age produces a permanent, long-term reduction in income because of reduced employment prospects. That is, layoffs push families toward poverty. Third, the effect of poverty on age-specific mortality is brutal. In the United States, the poor die 10 to 15 years earlier than the wealthy. 

What inferences, then, can be drawn from these facts? Governors who persist in state-wide lockdowns are making a huge mistake. They think that they are safeguarding workers and their children from COVID-19; they are actually exposing them to mortality risk from unemployment and poverty.

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None of this is to say that governments should ignore the threat posed by COVID-19.  It is a highly contagious disease that poses a very serious threat to the elderly.

But there is a middle ground approach to COVID-19 that does not create the lose-lose outcome now on offer from some governors. That approach, currently being applied in Sweden, boils down to protecting the elderly and those with co-morbidities, while allowing everyone else to go back to work and school.

In part, the protection of the elderly can be done through public policy; targeted testing of nursing home workers and home health aides can be used to reduce the exposure of the elderly and medically vulnerable to infection. The elderly and vulnerable can also be protected by everyone else through common decency. It is not beyond the capacity of citizens to shop or run errands for their elderly, or otherwise at risk, neighbors. It is also not beyond the capacity of citizens to wear masks in their presence.  

As the old saying in economics goes, there are no free lunches. A middle ground approach, such as that being followed by Sweden, implies a short-run increase in the rate of growth of COVID-19 infection among the young and healthy. That experience is unlikely to be pleasant. 

It has to be weighed, however, against the other options on offer. The one being offered now by some state governors will not just be unpleasant; it will be disastrous.

Alexander Galetovic is a senior fellow at the Universidad Adolfo Ibáñez in Santiago and a research fellow at the Hoover Institution. Stephen Haber is professor of political science at Stanford University and a senior fellow at the Hoover Institution.