Economic model predicts Indiana’s COVID-19 death rate will skyrocket from returning too quickly


INDIANAPOLIS — As Marion County trails behind almost all of Indiana in reopening after the coronavirus shutdown this spring, a national economic model predicts that the state runs the risk of trading jobs for lives if it moves too quickly in putting Hoosiers back to work.

A model developed by The Wharton School at the University of Pennsylvania considers the variables of full and partial reopening of Indiana’s economy and behavioral changes by Hoosiers in the wake of this spring’s pandemic shutdown.

Should the state immediately reopen to pre-pandemic levels and residents revert back to the same social distancing behaviors they practiced before the coronavirus arrived, the Indiana Gross Domestic Product would still be off at least 9.5% compared to a year ago while employment would skyrocket.

Exploding, too, would be the number of infected Hoosiers and the lives that would be lost.

As of noon Sunday, the Indiana State Department of Health reported 27,778 confirmed cases of COVID-19 and 1,607 deaths.

If Indiana were to put the pedal to the economic rebound metal immediately, by mid-July there would be 373,062 cases of coronavirus in Indiana and 23,087 deaths.

More moderate responses by both businesses and residents show an increase in infections and lost lives, but also a more gradual improvement in jobs and economic activity.

“Finding the sweet spot is tricky. It’s related not only to the social distancing, the degree of partial lockdown, but also the degree to which there are behaviors associated with wearing masks,” said Dr. Timothy Slaper, co-director of the Indiana Business Research Center at the IU Kelley School of Business.

The Wharton Model does not take into consideration the economic impact of additional infections in the workplace and the cost to the state’s medical care system.

“So full reopening means we get to even job destruction/creation sooner than a partial reopening,” said Dr. Slaper. “I think that’s a good critical takeaway for people to understand.”

Dr. Slaper said that Indiana will fare better than some tourism-dependent states because of its manufacturing and agriculture base.

Still, some 83,000 workers in central Indiana draw a paycheck based on the visitor, convention, entertainment and dining industries.

Slaper said the temptation of reopening too soon is tempered by the risk of a potential resurgence of the coronavirus in the fall just as the economy begins its expected recovery.

“I think that second punch will definitely have some extraordinary ripple effects for businesses. In small businesses, for example, there are employees, for example, that were on the knife edge as it was.”

Indianapolis Mayor Joe Hogsett and Marion County Public Health Director Dr. Virginia Caine will relax their shutdown orders this week, permitting stores to reopen at 50% capacity and outdoor dining to resume, while manufacturing and personal services businesses will remain closed until June 1.

Marion County has approximately 30% of the deaths and positive cases in the state from COVID-19.

Most Popular

Latest News

More News