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Pandemics and social capital | VOX, CEPR Policy Portal

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Via VOX EU

The global spread of COVID-19 threatens to have serious economic consequences worldwide. This induces us to look at the past for some hints about the possible long-term effects of a severe pandemic. The case of the Spanish flu that started in spring 1918 and spread rapidly across the world seems to be a particularly useful term of comparison.

The Spanish flu was caused by an influenza H1N1 virus, and all influenza A pandemics since 1918 have been caused by descendants of this virus (Taubenberger 2006). This is one of two factors behind the continued interdisciplinary attention on the Spanish flu. The other factor is its exceptional severity, especially during the second (September to November 1918) and the third wave (early 1919). The third wave, which only involved some countries, was probably exacerbated by the end of WWI, with the return home of soldiers and the resumption of commerce. However, looking at the overall mortality rates associated with the influenza pandemic, there is considerable variance among neutral and belligerent countries. For example, in neutral Spain influenza mortality rates were 12.3 per thousand, higher than in Italy (10.7 per thousand) which was one of the worst-affected by the pandemic among western European countries involved in WWI (Figure 1).

Figure 1 Spanish flu mortality in belligerent and neutral countries

Source: Le Moglie et al. (2020).

The exceptionally high mortality is the combined result of the extremely high infectiousness of the disease and a case fatality rate of greater than 2.5%, compared to the usual rate of less than 0.1% characterising other influenza pandemics. Overall, this resulted in an estimated range between 50 and 100 million victims globally (Johnson and Mueller 2002, Taubenberger 2006), making it one of the worst pandemics in human history (Alfani and Murphy 2017). 

The world struggled to cope with the pandemic, as vaccines for influenza had not yet been developed and none of the cures suggested was effective (Taubenberger 2006, Alfani and Melegaro 2010). Additionally, in Europe and the US a significant share of physicians and nurses were involved in the war, leaving civilian hospitals badly understaffed. Different locations attempted to combat the pandemic with a variety of methods. Quarantines, closure of schools, bars, churches, and other gathering places along with compulsory gauze masks were all unsuccessful in containing the disease. High mortality and the concentration of deaths among young adults increased the ability of the pandemic to disrupt the social tissue. The fear of contracting influenza dramatically altered social interactions. Measures of public health, general encouragement from the authorities and the media to avoid inter-personal contacts, and rumours about enemy spies spreading the infection beyond the lines as a kind of biological weapon created a climate of suspicion and mistrust (Alfani and Melegaro 2010, Cohn 2018).

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The long-term effects of the Spanish flu went well beyond the immediate demographic losses that it caused. Much research has been conducted into its consequences for the health of survivors (Almond 2006, Myrskylä et al. 2013, Bengtsson and Helgertz 2015). There have been fewer studies of the way in which the experience of Spanish flu shaped individual behaviour and human societies at large (Almond 2006, Karlsson et al. 2014, Bengtsson and Helgertz 2015, Cohn 2018). A growing literature argues that the second-worst pandemic in human history, the Black Death of the 14th century, had long-term economic, social and cultural consequences, shaping behaviour well into the 20th century (Voitgländer and Voth 2012, Jedwab et al. 2016, Alfani and Murphy 2017). In a new paper (Le Moglie et al. 2020), we show that similar to the Black Death, the Spanish flu had long-lasting social consequences leading to a decline in social trust. We argue that this potentially resulted from the experience of social disruption and generalised mistrust which characterised the pandemic period.

Uncovering the broader societal impact of a historical pandemic such as the Spanish flu is obviously challenging. No direct survey measures exist on attitudes and social trust. Instead we exploit information about the descendants of those who experienced the historical event (Algan and Cahuc 2010). This method leverages the fact that cultural traits and attitudes are inherited across generations, passing on from parents to children. We use the General Social Survey (GSS), which is a representative survey of the US population. Social trust is derived from those respondents who were direct descendants of migrants to the US, and by using this information, we are able to provide an estimate of social trust for each country of origin before and after the spread of the Spanish flu. For each country of origin, we compare the estimated levels of social trust for the two periods, and analyse how the possible difference in trust depends on the pandemic mortality rate. The results of our analysis suggest a negative and statistically significant effect of the Spanish flu on trust. An increase in influenza mortality of one death per thousand resulted in a 1.4 percentage points decrease in trust. 

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The available historical data also provide evidence on a possible mechanism underlying the change in trust, namely the neutrality of the home country in WWI. A narrower resonance of the war within neutral countries, together with the specific lack of war censorship on media, might have led their respective citizens to internalise the extent and severity of the pandemic, and thus altered their social interactions accordingly. Consistent with this hypothesis, we find a stronger reduction in social trust for the descendants of people migrating from neutral countries which were heavily hit by the epidemic.

Overall, our analyses suggest that experiencing the Spanish flu and the associated condition of social disruption and generalised mistrust had permanent consequences on individual behaviour in terms of lower social trust. This loss in social trust constrained economic growth for many decades to follow. These findings have important implications for our understanding of the economic consequences of different approaches to managing the COVID-19 crisis.

On 13 March 2020, as the infection continued to spread in Italy at a brisk pace, Standard Ethics – an independent sustainability rating company – improved its outlook for the country from negative to stable. This is because, according to Standard Ethics, “in the emergency resulting from the spread of the Covid-19 virus, [Italy] has re-established a remarkable solidarity and united purpose. […] It is possible that by courageously overcoming this difficult test, a beautiful nation like Italy, will rediscover its vigour and optimism” (press release, 13 March 2020). The case for the Spanish flu was the opposite: government institutions and national health care services largely proved ineffective in facing the crisis, while civil society experienced a serious breakdown due to the climate of generalised suspicion. Potentially useful interventions, especially regarding social distancing, were negatively affected by mistakes in communication as well as by the specific historical context – heavily perturbed by WWI – in which the Spanish flu took place (Alfani and Melegaro 2010). Consequently, although some of these interventions were quite similar to those introduced by Italy (and by a growing number of other countries) during the COVID-19 crisis, they led to social division instead of greater unity and solidarity. And as we argue, these mistakes and failures in managing the Spanish flu had long-lasting negative economic consequences. 

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Great care is required when commenting upon the final consequences of a crisis that is still ongoing. However, history might have a warning for those countries that opt for restricting their pandemic management to light measures only: should the epidemic spread widely and out of control, the cumulated economic costs to be paid in the long run might be quite higher than they seem to be expecting.

References

Alfani, G and A Melegaro (2010), Pandemie d’Italia. Dalla peste nera all’influenza suina: l’impatto sulle società, Egea.

Alfani, G and T Murphy (2017), “Plague and Lethal Epidemics in the Pre-Industrial World”, Journal of Economic History 77(1): 314–343.

Algan, Y and P Cahuc (2010), “Inherited Trust and Growth”, American Economic Review, 2060–2092.

Almond, D (2006), “Is the 1918 Influenza Pandemic Over? Long-Term Effects of In Utero Influenza Exposure in the Post-1940 U.S. Population”, Journal of Political Economy 114(4): 672–712.

Bengtsson, T and J Helgertz (2015), “The Long Lasting Influenza: The Impact of Fetal Stress during the 1918 Influenza Pandemic on Socioeconomic Attainment and Health in Sweden 1968-2012”, IZA Discussion Paper 9327.

Cohn, S (2018), Epidemics. Hate and Compassion from the Plague of Athens to AIDS, Oxford University Press.

Jedwab, R, N D Johnson, and M Koyama (2019), “Negative shocks and mass persecutions: evidence from the black death”, Journal of Economic Growth 24: 345–395.

Johnson, N and J Mueller (2002), “Updating the accounts: global mortality of the 1918-1920 ‘Spanish’ influenza pandemic”, Bullettin of the History of Medicine 76: 105–115.

Karlsson, M, T Nilsson and S Pichler (2014), “The impact of the 1918 Spanish flu epidemic on economic performance in Sweden: An investigation into the consequences of an extraordinary mortality shock”, Journal of Health Economics 36: 1–19.

Le Moglie, M, F Gandolfi, G Alfani and A Aassve (2020), “Epidemics and Trust: The Case of the Spanish Flu”, IGIER Working Paper No. 661.

Myrskylä, M, N Mehta, and V Chang (2013), “Early Life Exposure to the 1918 Influenza Pandemic and Old-Age Mortality by Cause of Death”, American Journal of Public Health 103(7): 83–90.

Taubenberger, J K and D M Morens (2006), “1918 influenza: the mother of all pandemics”, Emerging Infectious Diseases 12(1): 15–22.

Voitgländer, N and H Voth (2012), “Persecution Perpetuated: The Medieval Origins of Anti-semitic Violence in Nazi Germany”, Quarterly Journal of Economics 127(3): 1339–1392.


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