We introduce two types of agent heterogeneity in a calibrated epidemiological search model. First, some agents cannot afford to stay home to minimize virus exposure. Our results show that poor agents bear most of the epidemic’s health costs. Furthermore, we show that when a larger share of agents fail to change their behavior during the epidemic, a deeper recession is possible. Second, agents develop symptoms heterogeneously. We show that for diseases with a higher share of asymptomatic cases, even when less lethal, health and economic outcomes are worse. Public policies such as testing, quarantining, and lockdowns are particularly beneficial in economies with larger shares of poor agents. However, lockdowns lose effectiveness when a larger share of the agents take voluntary precautions to minimize virus exposure independent of the lockdown.
In this Commentary, we show how the interpretation of test results is affected by a test’s reliability rate. Moreover, we discuss how test fallibility may affect the use of tests as a tool to curb the spread of a disease. In particular, we show how administering inexpensive and less precise tests that can be conducted multiple times may be a more efficient way of curbing the pandemic than administering expensive more precise tests once.
This Commentary discusses how the presence of foreign-born workers in a local labor market affects the decisions of native-born workers to leave the labor force or move to another state. We analyze short panels obtained through the Current Population Survey and find that, in the short run, less-educated native-born workers react to a larger stock of foreign-born workers by either moving to a different state or dropping out of the labor force. In terms of magnitude, the effect is small but not insignificant.