Greetings from the Cameron School of Business. The hallways might be quiet, but there is a TON of learning going on as we have quickly converted our classes to online classes in the wake of coronavirus. Perhaps we’ll write about how this will change higher education in another blog post. Today, however, we seek to gain some insights about healthcare and economic lessons learned over a century ago during the Spanish flu pandemic. These takeaways include the value of social distancing combined with economic policy to more effectively mitigate the health and economic tragedies.
Please note that the name of the flu doesn’t mean that the strain originated in Spain; however, Spain was one of the first countries that reported the severity of the virus. The pandemic overwhelmed the medical establishment and spread very rapidly, particularly in military camps where soldiers were training for combat in World War I. The CDC notes that the pandemic spread in waves highlighted by peaks in colder months – the first wave happened in March-April of 1918, the second hit in September-November of 1918 (almost 200,000 deaths in October), and the third wave commenced in January of 1919. Notably, returning soldiers at the end of the war enhanced transmission.(1)
The Spanish flu was deadly. Estimates range from 20 million to 100 million worldwide deaths with at least a half-million deaths in the U.S. (roughly equivalent to the population of Washington D.C. at that time.) Many researchers have attempted to analyze the small bit of data that exists and conclude that mortality rates and population density during the Spanish flu are related as urban communities were caught off guard by the pace of the virus and healthcare workers had no good treatment options.(2) This is a strong case for social distancing. (Research also shows that there is less of a relationship between excess mortality rates and population density - meaning that the Spanish flu spread about as easily to rural areas as during any other outbreak of flu.)
Universities were also caught off guard with the speed of the spread the virus, and students had to be treated in dorms and gyms.(3) Thankfully, we had adequate warning of the coronavirus at UNCW and students are currently taking classes from their homes.
Along with the spread of the Spanish flu was a call for “social distancing”, and many businesses were ordered to temporarily close. Unfortunately, these mitigating efforts happened well into the spread. Economic times were tough, with real economic growth slowing in 1919 and economic recession hitting in 1920. One thing to note: it is almost impossible to decouple the aggregate economic impact of the flu and public health policies from the impact of ceased war efforts.
A study on a much smaller scale, using data from Sweden during the Spanish flu, notes that returns from business ownership fell significantly while earnings (wages) were not as impacted.(4) This disproportionate burden on business owners is to be expected given the level of risk that entrepreneurs embrace when starting an entrepreneurial venture including the risk of a collapse in demand.
There are many takeaways from the Spanish Flu as we struggle against COVID-19.
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