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Economics: Another Side of the Mask Discussion

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So, just how impactful is mask-wearing during a pandemic? That seems to be the recurring topic of the day.

While much of the discussion around masks has centered on public health concerns, it looks like there are financial considerations too.  

Our research friends within Goldman Sachs investigated the link between masks and public health, and masks and economic recovery. The conclusion? A mask mandate could be good for our economy. They got there by starting with three questions:

  • How effective is a face mask mandate in increasing face mask usage?
  • Does increased face mask usage lower virus transmission, and if so by how much?
  • How economically valuable is a face mask mandate in terms of reducing the need for broad lockdowns with their well-documented negative effects on GDP? 

Researchers found that a national mask mandate could take the place of lockdowns that would otherwise reduce US GDP by about 5%.

For context, here’s how the researchers got to the masks vs lockdown comparison and the 5% GDP figure:

They started with a cross-country analysis on masks and infection rates, and looked at an index they’d created called the Effective Lockdown Index (ELI) – a combination of lockdown restrictions and social distancing data – and  calculated how much it would have to increase to match the impact mask mandates have on curbing infections.

Their finding was that to match the impact of a mask mandate, the ELI would have to increase to such an extent that it could cut GDP by close to 5%. For reference, they noted the increase in the index from January to April cost 17% of US GDP.

We admit that lockdowns may feel decisive because you can see the effort, while a mask can feel less so. However, the results of Goldman Sachs’ research show that masks can be deceptively powerful. Looking at state mandates and county-level data, the researchers found that mask mandates are associated with a 25% decline in the growth rate of infections, and even larger effects on the growth rate of fatalities.

How much of our GDP comes from states without mask mandates? When published, the Goldman Sachs team noted that 45% of the United States’ GDP lies in states that didn’t require masks. This isn’t half, but it’s a considerable chunk, and with so much of the economic outlook being tied to containing Covid-19, quantifying the economic impact of a mask mandate shows one way policymakers might help get the recovery back on track.

Feel like a bit of a rollercoaster to you? (Us, too). As late as March 30, World Health Organization officials advised that there was no evidence of mask wearing providing any public health benefits. But since the first wave of infections, it has become clear that lockdowns aren’t the only way to lower virus transmission significantly.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.