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Municipalities in SP that adopted more severe social isolation did not have worse economic performance, reveals research

Carried out in partnership between Unicamp and the University of Texas, research also shows that the effectiveness of isolation is greater when accompanied by neighboring municipalities

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Study carried out in partnership between Unicamp and the University of Texas, published this Wednesday (17) in the journal Plos One, indicates that municipalities in the state of São Paulo that carry out social isolation more severely did not have worse economic performance. The results also indicate that the effectiveness of social isolation in containing the pandemic is greater when the policy is articulated regionally, and not just at the municipal level. 

The research evaluated the aggregate economic impacts in the municipalities, verifying that some sectors tend to be more affected than others. The results came from the analysis of economic, social isolation and health indicators. Data from 104 municipalities in São Paulo were observed, in which around 91% of Covid-19 cases were concentrated between March and June 2020. Social isolation rates were obtained from the State Data Analysis System Foundation (SEADE). The economic indicators taken into consideration were the municipal collection of Tax on the Circulation of Goods and Services (ICMS) and formal employment data from the General Register of Employed and Unemployed Persons (CAGED). 

The research is part of a project that has funding from the National Council for Scientific and Technological Development (CNPq) and the Ministry of Health. The following are part of the group of researchers: Alexandre Gori Maia (Unicamp), Letícia Marteleto (University of Texas), Cristina Guimarães ( FIPE/USP) and Luiz Gustavo Fernandes Sereno (Unicamp). 

“We found evidence that by relaxing social isolation there is a substantial increase in the number of cases and from an economic point of view not much changes, because the economic dynamics end up being affected by regional dynamics”, explains the professor at the Institute of Economics ( IE) from Unicamp and coordinator of the research project, Alexandre Gori Maia. “The indicators show that the greater the isolation, the lower the number of cases and deaths. On the other hand, when we relate what would happen to the municipality in economic terms if it had not intensified isolation, we observed that there would be no significant changes”, he continues.

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“There is no evidence that municipalities that adopted more severe isolation had worse economic dynamics”, says professor Alexandre Gori de Maia

This does not mean that there was not a major economic impact caused by the pandemic, Alexandre emphasizes, but that it is not linked exclusively to social isolation. “There was a general drop in tax collection, but it was not the fact that one municipality was more isolated than another that caused it to have a worse economic performance. There is no evidence that municipalities that adopted more severe isolation had worse economic dynamics,” she says. Therefore, according to the professor, isolation ends up being the best strategy until there is a pharmacological intervention, such as a vaccine, for a significant part of the population.

Isolation actions need to be coordinated 

Another result of the study indicates that the effectiveness of isolation in controlling the pandemic is better when there are regional actions, and not just focused on the municipality. Therefore, Covid-19 control measures should not be restricted to municipal borders. “There is even a warning that these policies need to be coordinated regionally. When making a local decision, in the municipality, the impact is much smaller”, assesses Alexandre. Uncoordinated actions between state and federal levels regarding social distancing are also evidenced as limiting the control of the epidemic in the country. 

Isolation has more effect in more vulnerable municipalities

The researchers also observed that isolation was more effective in controlling the pandemic in the most vulnerable municipalities in the state. “One hypothesis is that it is much more difficult to maintain distancing rules in more vulnerable places, so in this case the best strategy seems to be 'stay at home'”, he observes. Therefore, the study indicates that pandemic control policies need to take socioeconomic inequalities into account, as poorer populations in general are at greater risk of infection. 

Check out the full article: The short-term impacts of coronavirus quarantine in São Paulo: The health-economy trade-offs

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