Working Papers

Political Economy of Covid-19 Public Health Measures (Job Market Paper) 

Abstract: Deaths per 100k persons from COVID-19 vary markedly across jurisdictions within the USA and Canada as well as between these two countries. The USA has nearly three times more deaths per capita than Canada – partially due to stricter and better respected Public Health Measures (PHMs) in most Canadian provinces than in most American states. Significant economic costs are associated with these PHMs; and a broad body of literature exists to measure the macro and microeconomic impact of these policies. It is also clear that mortality due to Covid-19 strongly depends on age. This paper contributes to the political economy and cost-benefit analysis literature pertaining to COVID-19 PHMs. Specifically, how the Net-Present-Value (NPV) of these policies varies with age across the Canadian population, and how that variation influences the political economy of the PHMs. Bergstrom and Hartman’s (2008) framework, which employs population projections and lifetables to estimate the political support for public pension reform, is adapted to this context. Assuming individuals support for PHMs depends solely on their expected NPV, the benefits of PHMs are the expected Value of Life Years saved from not contracting the COVID-19 virus and the costs account for the expected lost income due to the unemployment caused by the PHMs as well as the value of forgone consumption/leisure. Preliminary results find that a minority of voting age Canadians have negative expected NPV from the PHMs, while the majority have positive NPV.