Business Shutdowns and COVID-19 Mortality

Governments around the world have adopted unprecedented policies to deal with COVID-19. This paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We leverage upon highly granular death registry data for over 4,000 Italian municipalities in a diff-in-diff approach that allows us to credibly mitigate endogeneity concerns. Our results, which are robust to controlling for a host of co-factors, offer strong evidence that business shutdowns are very effective in reducing mortality. We calculate that the death toll from the first wave of COVID-19 in Italy would have been twice as high in their absence. Our findings also highlight that timeliness is key: by acting one week earlier, the government could have reduced the death toll by an additional 25%. Finally, our estimates suggest that shutdowns should be targeted: closing shops, bars and restaurants saves the most lives, while shutting down manufacturing and construction activities has only mild effects.