Quantifying and Simulating the Impact of Social Distancing Policies on Firm-Level Productivity

This project analyzes the impact of social distancing policies in the workplace in the UK on firm- and organization level productivity. The economic cost are likely to be heterogeneous across firms and sectors as well as across regions as space use intensities vary systematically across the UK, giving rise to the possibility of COVID19 to significantly exacerbate regional economic inequalities raising the necessity to develop more cost-effective and targeted support measures to firms. To do so, the project will produce a novel data product jointly with the ONS to be subsequently hosted and analyzed on the ONS Secure Research Service. This data product will bring together detailed information on the physical make up of the population of the UK's premises in which economic activity takes place along with detailed information on employment, turnover and producivity at the premise level by combining the ONS's Inter-Departmental Business Register (IDBR) with the Valuation Office Agency business rates valuation lists of physical premises. The data product is then subsequently studied through the lense of an economic model that will incorporate "physical space" as a factor of production in the estimation of production functions and empirically calibrate an already developed theoretical model. The empirically disciplined model will both help quantify the economic impact of the existing social distancing policies as well as allow the simulation of the economic cost of counterfactual social distancing policies across firms, sectors and regions of the UK helping identify policies that may be effective in reducing both the economic impact while mtaintaining disease containmentment objectives.