University of Chicago Harris School of Public Policy Dean Katherine Baicker joins Yahoo Finance’s Zack Guzman to discuss how coronavirus lockdowns and reopenings are impacting the U.S. economy.
ZACK GUZMAN: We're digging into the ways that countries shut down in the wake of the coronavirus pandemic. New data out there now indicating that maybe we didn't necessarily need to take a blunt approach to shutting everything down, and the tradeoff there between the hits to the economy and the plus side of saving lives out there.
And for more on this, I want to bring on a researcher who's been digging into all of the data. That would be Dean at the University of Chicago Harris School of Public Policy. Katherine Baicker joins us now. And Dean Baker, when we look at this, what have you seen in terms of what changes might be instituted now that we know so much more about how Americans have been walking around, using cell phone data? What's your take on what should be done if we maybe need to eventually institute some of these lockdowns yet again?
KATHERINE BAICKER: There's a huge amount of variation from business to business, from area to area in how much transmission risk there is for resuming economic activity. So going forward, what policymakers can do is balance the economic advantages of resuming some kinds of activity against the health risk posed by the contacts between customers, employees, other customers. And there's a way to start to reopen the economy that maximizes the economic gain without opening us up to a lot of transmission risk.
ZACK GUZMAN: Yeah, and that transmission risk has always been at the forefront of the public policy impacts. There is an interesting new study from the University of California at Berkeley shedding light on how many lives or how many, I guess, positive cases we should use. They didn't they didn't speculate on lives. But positive cases were saved in shutting down basically everything when we saw that go into effect back in March.
But now when we think about the data that you have when you look at maybe how long people stay in business is when they're there-- maybe at a Denny's or a Waffle House versus takeout at some of these fast food restaurants, what does that indicate about how you should structure maybe some of these reforms to just a blunt policy proposal of, shut down everything again?
KATHERINE BAICKER: I think there are a lot more nuanced tools available to us now than there were before. And in the world of incredible uncertainty we were operating in in February, March, starting with shutting everything down was probably a very reasonable policy response. But now as we're learning more and as we're getting better at treating and identifying cases, we can start to reopen the places where there's minimal contact risk.
And as you were noting, people interact with different businesses very differently. Some places, you walk in, you grab your staff, you walk out. There's not a lot of contact. Some places, you go, you browse, you look around-- or at least you used to, back when things were open before.
Think about an electronics store versus a lawn and garden place. The electronics store, maybe you're looking at a lot of things. You're picking up a lot of objects. You're spending some time. You're comparing. You're enjoying browsing. Nobody browses for fertilizer in quite the same way. You go, you grab the bag, you go home.
And so that kind of purposeful shorter visit is probably much lower risk. But also, businesses have the chance to modify the way they do business. You mentioned takeout or curbside pickup. Lots of businesses are thinking about creative ways to continue to provide goods and services to the public and employment opportunities for their workers while keeping everyone safe. And I think understanding how people move through businesses not only tells us what's high risk, but tells us how to make other things lower risk.
ZACK GUZMAN: Yeah. And also, I never thought I'd see the day where a haircut would become a black market commodity out there too. But we have seen that. And you think about transmission risk there, if you have one barber servicing one person at a time and trying to be safe and wearing masks, all the things there. Here in New York, of course, phase one does not include barbershops. We'll have to wait a little bit more on that front.
But one interesting piece from this study as well, the Cal Berkeley Study, looked at maybe the risks associated with opening schools back up. I know that those costs have been there for a lot of parents, and working and trying to figure out daycare as well. But the health risks there don't necessarily seem all that high. So what is the economic look at maybe schools as we get to the fall, and what might be the hit on that front?
KATHERINE BAICKER: Well, schools are a great example of something that has a system-level impact, because of course, it's not just the kids and their teachers. It's the kids' parents who then are able to go back to work themselves instead of doing homeschooling while their kids are remotely educated.
Now, I think it's pretty clear that kids themselves have a very low risk of adverse health outcomes from the disease. What's a little less clear to me is the degree to which the kids spread that coronavirus risk to their parents, to their grandparents, to other people in their community. And I think epidemiologists and public health officials are still catching up on that mechanism, in part because we've seen shutdowns that prevented it.
Once you start to reopen things like schools and daycares, I think we're going to get a lot more information about how much of a disease vector those locations provide. And we have to be ready to flex up and down in our level of economic activity, kids being back in schools and daycare and much more in the fall as we start to see what the trajectory of the disease looks like.
There's a lot of uncertainty in the models. It could be that things taper down rather smoothly. It could be that there are a lot of peaks and troughs. And the peaks we see in the fall could be as great as the ones we saw in the spring. There's just a lot of uncertainty about the disease itself.
ZACK GUZMAN: Yeah, for sure. And I know that there are a lot of parents as well when you think about even summer camps and trying to figure out whether or not they'll be able to send their children to that as well. A lot of health risks here. But as you note, a lot of economic risks and data to dig through here. So I appreciate you taking the time to chat with us. Dean Katherine Baicker, Dean at the University of Chicago Harris School of Public Policy, thanks again.
KATHERINE BAICKER: Thank you.