A study from the University of Pennsylvania’s Wharton School says a fully opened economy would add jobs but would come at the cost of far more people dying from coronavirus.
The Penn Wharton Budget Model analyzed the health and economic effects of states partially reopening – lifting emergency declarations, stay-at-home orders, and school closures – as well as fully reopening all of the above as well as businesses and restaurants. The model assumed that any policy change occurs on May 1, 2020.
If states do not reopen before June 30, cumulative national deaths due to coronavirus would rise to around 117,000 by June 30 (including deaths prior to May 1). Gross domestic product on June 30, 2020 would be 11.6 percent lower than GDP one year earlier. About 18.6 million jobs would be lost between May 1 and June 30.
In Delaware that would translate into a tiny gain of about 900 jobs from May, with the Gross Domestic Product dropping 11 percent and the number of deaths totaling nearly 500.
Should Delawareans see a full reopening as a “return to normal” and as a result relax their own voluntary social distancing practices — behaving in a manner consistent with Feb 1, 2020 – cumulative national deaths would reach 950,000 by June 30. Job losses would turn to of 4.1 million in jobs gained, erasing some of the job losses prior to May 1.
In Delaware, a full reopening with reduced social distancing adds 15,700 jobs between May and the end of June, with the GDP down 8.3 percent. The price would be an estimated 4,100 deaths.
It was not clear whether the full opening model takes into account the costs of a surge in hospitalizations that would overwhelm the state’s hospital system.
It also does not attempt what might happen should a second surge of COVID-19 cases occur during the flu season.
Authors note that COVID-19 has many unknowns that make modeling difficult.
The model will be regularly updated, authors stated.
For more information and state-specific estimates that include partial lifting of restrictions, see the full PWBM coronavirus reopening simulator.
