for comments. Laurence O'Brien and Igor Kuznetsov provided excellent research assistance. João Granja gratefully acknowledges support from the Jane and Basil Vasiliou Faculty Scholarship and from the Booth School of Business at the University of Chicago. Yannelis and Zwick gratefully acknowledges financial support from the Booth School of Business at the University of Chicago. We are grateful to the Small Business Administration, Womply, and Homebase for providing data. This draft is preliminary and comments are welcome. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w27095.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
Why have the effects of COVID-19 been so unevenly geographically distributed in the United States? This paper investigates the role of social capital as a mediating factor for the spread of the virus. Because social capital is associated with greater trust and relationships within a community, it could endow individuals with a greater concern for others, thereby leading to more hygienic practices and social distancing. Using data for over 2,700 US counties, we investigate how social capital explains the level and growth rate of infections. We find that moving a county from the 25th to the 75th percentile of the distribution of social capital would lead to a 18% and 5.7% decline in the cumulative number of infections and deaths, as well as suggestive evidence of a lower spread of the virus. Our results are robust to many demographic characteristics, controls, and alternative measures of social capital.
Highlights
We integrate multiple datasets to examine how COVID-19 intervention policies impact the hospitality labor market.
We find that business closure policies are associated with a 20–30% reduction of non-salaried workers in the hospitality industry with the biggest impact on leisure from March-April of 2020.
Business reopening policies play a statistically significant role in slowly reviving the labor market.
The rise of new cases on a daily basis is associated with the continued deterioration of the labor market.
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