Counting the Costs of Lockdowns 

Ananish Chaudhuri is Professor of Experimental Economics at the University of Auckland and the author of “Nudged into lockdown? Behavioural Economics, Uncertainty and Covid-19.” 

As we approach the second anniversary of WHO’s designation of Covid 19 as a pandemic in March 2020, many countries around the world, including New Zealand, have relied on and at times continue to utilise various forms of social distancing including lockdowns.  

But along the way, while we have learned a lot about infectious disease transmission and resistance, we have also accumulated voluminous evidence regarding the efficacy of these non-pharmaceutical interventions (NPI). 

A group of researchers at Johns Hopkins University have undertaken a meta-analysis of existing studies looking at whether lockdowns reduce Covid 19 mortality. Lockdowns are defined as the imposition of at least one compulsory NPI involving “any government mandate that directly restrict people’s possibilities, such as policies that limit internal movement, close schools and businesses, and ban international travel.” 

Following multiple levels of screening, the authors identified 24 studies that met all the necessary criteria for being included in their meta-analysis.  The studies were then separated into three groups: studies that look at whether countries with greater lockdown stringency reported fewer deaths; studies that look at the impact of shelter-in-place orders, and finally studies that look at a specific NPI.    

An analysis of each of these three sets of studies supports the conclusion that lockdowns have had little to no effect on Covid 19 mortality. More specifically, stringency index studies find that lockdowns in Europe and the United States only reduced Covid 19 mortality by 0.2% on average. Shelter-in-place orders were also ineffective, only reducing Covid 19 mortality by 2.9% on average. Specific interventions studies also find no broad-based evidence of noticeable effects on Covid 19 mortality. 

If one does not consider other factors, then one may be tempted to conclude that lockdowns were not all that successful in preventing Covid 19 deaths and leave it there.  

But while lockdowns were ineffective in reducing Covid 19 deaths, they imposed massive collateral damage. The most obvious is, of course, the loss of economic output and livelihoods.  

Using estimates provided by researchers at University College London regarding various possible estimates of lives saved by lockdowns, David Miles of Imperial College has shown that there are no conceivable values of lives saved such that the net benefit of lockdowns exceed the costs in terms of lost GDP.  

For instance, if the UK experienced a 9% drop in GDP and managed to save 440,000 lives, the total loss would have been 68 billion pounds. If, on the other hand, lockdowns saved only 20,000 lives and led to a 9% drop in GDP, then this came at a cost of 194 billion pounds to the economy. If the lockdowns saved 20,000 lives but led to a loss of 15% or 20% loss of GDP, then the cost to the economy is either 324 billion pounds or 435 billion pounds respectively.  

Typically, supporters of lockdowns tend to discount such arguments by arguing that economists tend to fixate on monetary measures. We cannot put a value on human lives. (Of course we can. Agencies like Pharmac routinely do so in deciding which drugs to fund and which not; but let us leave that aside for now.)  

Bear in mind that when we talk about saving lives, we are talking about preventing untimely death, a reduction in years of life. 

Research undertaken by John Gibson of Waikato University suggests that countries with a higher value of the Stringency Index fared worse in terms of Gross Domestic Product (GDP) growth rate. Such drops in GDP cause untimely death too.  

New Zealand’s real GDP in 2020 was 5.2% lower than expected, amounting to $14 billion of output not produced. By 2023 this gap will grow to $36 billion in real terms. Gibson suggests that, given what we know about the relation between GDP growth and life expectancy, this projected drop in output will lower life expectancy for each Kiwi by around 8 months. This is equivalent to 2 million fewer life years or the equivalent of 45,350 untimely deaths.   

Leaving aside dollars and cents: lockdowns have led to more total deaths overall. In other words, we may have succeeded in saving Covid 19 lives but at the cost of higher deaths elsewhere. The reason for this is easy to understand. Lockdowns and the laser-like focus on Covid 19 meant that other diseases went untreated as surgeries and scans were postponed.  

Research from Aarhus University shows that for twenty-four European countries, more stringent social distancing measures resulted in more total deaths compared to historic averages. The same is true for New Zealand; our 2020 lockdown led to excess deaths over historical averages.