On the fragility of the Italian economic territories under SARS-COV2 lockdown policies

Abstract

We leverage a granular representation of mobility patterns before and during the first wave of SARS-COV2 in Italy to investigate the economic consequences of various forms of lockdown policies when accounting for mobility restrictions between and within local jurisdictions, i.e. municipalities, provinces and regions. We provide an analytical characterization of the rate of economic losses using a network-based spectral method. The latter treats the spread of contagion of economic losses due to commuting restrictions as a dynamical system stability problem. Our results indicate that the interplay between lower level of smartworking and the polarization of commuting flows to fewer local labor hubs in the South of Italy makes Southern territories extremely important in spreading economic losses. We estimate an economic contraction of total income derived from commuting restrictions in the range of 10-30% depending on the economic assumptions. However, alternative policies proposed during the second wave of SARS-COV2 can pose a greater risk to Northern areas due to their higher degree of mobility between jurisdictions than Southern ones. The direction of economic losses tend to propagate from large to medium-small jurisdictions across all alternative lockdown policies we tested. Our study shows how complex mobility patterns can have unequal consequences to economic losses across the country and call for more tailored implementation of restrictions to balance the containment of contagion with the need to sustain economic output.