Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228506 
Year of Publication: 
2021
Series/Report no.: 
GLO Discussion Paper No. 752
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
The large economic costs of full-blown lockdowns in response to COVID-19 outbreaks, coupled with heterogeneous mortality rates across age groups, led to question non-discriminatory containment mea- sures. In this paper we provide an assessment of the targeted approach to containment. We propose a SIR-macro model that allows for heterogeneous agents in terms of mortality rates and contact rates, and in which the government optimally bans people from working. We find that under a targeted pol- icy, the optimal containment reaches a larger portion of the population than under a blanket policy and is held in place for longer. Compared to a blanket policy, a targeted approach results in a smaller death count. Yet, it is not a panacea: the recession is larger under such approach as the containment policy applies to a larger fraction of people, remains in place for longer, and herd immunity is achieved later. Moreover, we find that increased interactions between low- and high-risk individuals effectively reduce the benefits of a targeted approach to containment.
Subjects: 
Optimal containment policies
COVID-19
heterogeneous agents
mortality rate
voluntary social distancing
JEL: 
E10
H00
I10
Document Type: 
Working Paper

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