To lockdown or not to lockdown

I was talking on Whatsapp to my frail 85-year-old aunt in India yesterday. Her life revolves around the television set and two helpers assisting her to get by. She does not seem to understand or bother about the hue-and-cry of COVID-19. Despite repeated warnings, she requests her helpers to go out and buy groceries from the nearest market place, compromising her and her helpers' well-being and violating the government-mandated social distancing and lockdown. I am nervous about her reckless behaviour. I don't know what goes on in her mind. She believes in destiny, nobody can prevent what is destined. I do a counterfactual and put myself in her position. I would probably think, "What the heck? I will die either of COVID-19 or of a heart attack sooner or later." Death is after all, certain. It is only the timing that is not.

The Coronavirus pandemic has affected more than 1.8 million and more than 100,000 deaths across the globe. In the UK, where I live, initially, they were reporting COVID-19 death incidents with a disclaimer that people who died had underlying health conditions and are mostly older. They no longer do this now as the virus does not discriminate between ordinary people and the UK Prime Minister. This virus does not spare if we do not follow social distancing. We do not hear much about the age distribution of infections and fatalities because we do not have reliable data on it as yet. Using cross-country data, my recent article with Kunal Sen (Ideas for India blog) suggests that this deadly virus is hitting Western Europe and the United States really hard. The age distribution in all these countries is heavily skewed towards the elderly population. According to the CIA World Factbook, the elderly dependency ratio (the ratio of 65 plus to the 20-40 age groups) are 37% in Italy, 29% in the UK and 26% in the US. The same ratio is 9.8% for India, 8% in South Africa and even lower in many Sub-Saharan countries.

Since the virus has entered countries at different dates, it is hard to predict the peak of infections in different countries. Along with confounding factors and novel features of the virus, even virologists and epidemiologists do not have a common voice. One of the burning issues is about the colossal economic damage that will surely be caused by worldwide lockdown. The immediate impact is about a 20 to 30% loss of GDP for the G7 countries ('Financial Times', April 8, 2020). According to a recent 'Financial Times' survey, nearly three-quarters of Americans report that they suffered significant loss of family income during this crisis and the crisis is not over yet. Nearly half report that they will be without any income if the virus incapacitates them with a debilitating illness. Should we continue the lockdown until the virus subsides? On this question, economists are broadly in consensus that lockdown should be continued ('Financial Times', April 8, 2020). Recently, Emil Verner at the MIT Sloan School of Management with two economists from Federal Reserve, Sergio Correra and Stephen Luck persuasively argue that the economic loss from no public health intervention is far greater than the loss from such intervention. They use the data from the 1918 flu epidemic to demonstrate this. However, it is not clear whether these economists keep India in their orbit when they come to this consensus. The case of India is special because it has a population of 1.37 billion and a density of 419.80 people per square kilometre.

The imminent issue is whether the present draconian lockdown should be continued. Given that the labour force has a vast informal sector with migrant workers living on the edge, a prolonged lockdown would have devastating consequences for them. Debraj Ray and S Subramanian (Ideas for India blog) propose that a restricted shut down may be a reasonable approach where young workers who pass an official antibody test are allowed to work while households are left with their voluntary self-restriction mechanism to prevent the spread of infections within the family. This is a pragmatic approach although there is a caveat that young workers could transmit the virus to the elderly after returning from work. They cannot be effectively isolated from the elderly given the acute space problem in India. At this juncture, a feasible option is to have targeted intervention with an aim to bring herd immunity into the community. There is no straightforward way of doing this without entailing some costs to society. Here is a suggestion. First, continue the lockdown for at least another month with a massive public subsidy to the affected people. Make sure that the public distribution system and supply chains are in order. The Indian government is working at its best on this front. Second, during this lockdown period, build some temporary accommodations for the potentially healthy workforce. Identify the healthy, immune workers by administering antibody tests. Then allow them to work and keep them in these newly built accommodations sequestering them from the vulnerable elderly. This task should be decentralised among the states with enough state subsidy. This is a difficult job but not impossible given that individual states are already building their own Covid hospital facilities. Complications and resistance may arise for sequestering workers. Here, self-selection and incentives may work. If a young lad is given an option of staying home idle without income or working with a temporary period of family isolation, this mechanism is likely to work.

The central government should simultaneously allocate ample national resources to medical research to find a vaccine. This could be used to immunise the vulnerable section of the population. Once such a vaccine is in place, young workers can slowly join their family. This may be a way to build herd immunity in the community. By that time the virus will recede and even if it comes back, there will be resilience. Continuation of a prolonged draconian lockdown without a well-designed public health policy in a globally integrated world will just shift the timing of mortality without greatly lowering the aggregate level of mortality. There will be always some small pockets of infections lurking which can never be eradicated and could break out someday. The additional problem in India is the lack of awareness about this virus among people like my aunt. Perhaps, active campaigning strategy coordinated by the government will enhance awareness about the reality and myths about this virus.

The writer is a Professor of Macroeconomics at the Durham University Business School, UK. Without implicating them, Clive Bell and Sushmita Maitra are gratefully acknowledged for useful insights and comments. Views expressed are strictly personal