We investigate the effectiveness of business shutdowns to contain the Covid-19 disease. In March 2020, Italy shut down operations in selected sectors of its economy. Using a difference- in-differences approach, we find that municipalities with higher exposure to closed sectors experienced subsequently lower mortality rates. The implied life savings exceed 9,400 people over a period of less than a month. We also find that business closures exhibited rapidly diminishing returns and had large effects outside the closed businesses themselves, including spillovers to other municipalities. Overall, the results suggest business shutdowns are effective, but should be selectively implemented and centrally coordinated.
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© 2021 Bongaerts et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.