On the employment and health impact of the COVID-19 shock on Italian regions: a value chain approach

Do We Learn From Errors? The Economic Impact of Differentiated Policy Restrictions in Italy

“…Indeed, areas characterized by higher levels of essential sectors tend to experience higher economic consumption, but better performances also in terms of pandemic intensity. Our finding is more in line with Ferraresi et al (2021) who show the absence of a significant trade-off between contagion and economic losses in the re-opening of essential sectors. Furthermore, this result might be explained by the fact that differently from the lockdown period, the resumption of economic activities was not limited to essential sectors in low restriction areas, thus reducing the relevance of such sectors in explaining infections dynamics, since also other business activities may have significantly contributed to the severity of the contagion.…”

“…Focusing on the concentration of manufacturing activities, our result is coherent with Ascani et al (2021) who show how industrial districts may experience higher excess mortality rates due to systematic interdependencies, direct face-to-face contacts and coordinated interactions among workers. Furthermore, given that manufacturing firms are usually characterized by business linkages that cross local administrative boundaries (Boschma and Iammarino 2009;Cainelli, Maria, and Ganau 2014;Kemeny and Storper 2015), such evidence is consistent with Ferraresi et al (2021) who highlight that export and investment oriented value chains may be more penalized by restrictions during the pandemic.…”

“…Since long term horizontal lockdowns generate major economic disruption, milder restrictions, which allow to partially resume economic activities with a limited rebound of contagion, are instead suggested as alternative more sustainable solutions that may be applied to manage new waves of the pandemic (Bertuzzo et al 2020). Indeed, empirical evidence suggests that horizontal lockdowns represent sub-optimal restriction strategies, as they abstract from specific characteristics of the local labour and economic structure, and do not equally balance healthcare risks and potential economic losses (Ferraresi et al 2021;Guaitoli and Pancrazi 2021).…”

“…For instance, territories characterized by higher specialization of economic activities and a higher concentration of labour force employed in essential sectors may experience higher contagion and mortality rates Montresor 2020, 2021). Territories whose production systems are more embedded in investment and export related supply chains may be subject to more severe economic losses during lockdown rather than regions specialized in essential sectors (Ferraresi et al 2021). Furthermore, the magnitude of the reduction of the economic activity is affected also by the level of integration and the intensity of business linkages across sectors, with firms whose downstream sectors are more constrained by social distancing subject to more negative economic results (Inoue and Todo 2020;Laeven 2022).…”

“…Nonetheless, several limitations affect extant evidence on the impact of these tailored restrictions. First, available analyses studying the impact of alternative policies tend to focus on restrictions differentiating according to the age or the infectious status of the population (Acemoglu et al, 2020;Fabbri, Gozzi, and Zanco 2021;Makris 2021), completely neglecting targeted restrictions towards business sectors that may constitute heterogeneous channels of virus transmission and consumption reduction Montresor 2020, 2021;Ferraresi et al 2021). Second, extant literature mainly analyses the effects generated by differentiated policies on the epidemiological dimension, showing their capability to shrink the contagion, but disregarding their economic impact (Guaitoli and Pancrazi 2021;Bonfiglio, Coderoni, and Esposti 2022).…”