Face Mask Mandate Could Save US Economy From Taking 5 Percent Hit
A face mask mandate from the federal government would help curb the surge of COVID-19 cases and save the US economy from taking a 5 percent hit to US GDP, according to CNBC.
Jan Hatzius, Goldman’s chief economist, investigated the ties between face masks and COVID-19. Hatzius and his team determined that face masks are statistically significant in regards to the health of citizens and the economy. “These calculations imply that a face mask mandate could potentially substitute for lockdowns that would otherwise subtract nearly 5% from GDP,” he said.
“We find that face masks are associated with significantly better coronavirus outcomes,” Hatzius said. “Our baseline estimate is that a national mandate could raise the percentage of people who wear masks by 15 [percentage points] and cut the daily growth rate of confirmed cases by 1.0 [percentage point] to 0.6%.”
The team focused on the use of face masks in different states. They found that only 40 percent of respondents in Arizona "always" wear a face mask in public, compared to 80 percent in Massachusetts. Next, the team analyzed the result of mandates issued by 20 US states between April 8 and June 24, comparing it with face mask use in public. The results are “large and highly significant” determining that state mask mandates increase the percentage of individuals who “always” or “frequently” wear face masks by about 25 percentage points in the 30 days after the government order.
Furthermore, the number of people who "always" wear masks increased by 40 percent after the 30-day mark. However, Hatizus stated that face masks only have a small impact on the rate of COVID-19 infections.
Critically, Hatizus said wearing face masks appears to have a causal impact on the rate of new Covid-19 infections. In conclusion, Hatizu found that a national mandate could increase the percentage of Americans wearing face masks by 15 percent and cut the daily growth rate by 1 percentage point.
Goldman Sachs then took the results of the investigation and applied it to potential effects on US GDP. The team looked at how severe a government lockdown would have to be to cut infections by 1 percent. Goldman estimates that the earlier lockdown efforts subtracted 17 percent from US GDP between January and April. The investment bank found that a face mask mandate could substitute for lockdowns that would otherwise subtract 10 percent.
“If a face mask mandate meaningfully lowers coronavirus infections, it could be valuable not only from a public health perspective but also from an economic perspective because it could substitute for renewed lockdowns that would otherwise hit GDP,” Hatzius wrote.