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What can be learned from the economic policies of other countries in response to the coronavirus epidemic? Lessons from the first wave

The coronavirus epidemic has instigated an economic crisis emanating from public health policies involving economic lockdown as well as behavioral reactions of workers and employers. The developed world has not seen such an extent of economic damage since at least the Second World War. We compare Israel’s battle against the first wave of the pandemic with that of other countries and show that while the infection rate in Israel was similar to that in other countries, the mortality rate was lower. Compared to Austria, by the end of May about 80 percent of the mortality gap can be ascribed to Israel’s younger population, while the remainder is due to advantages in the health-care system and some particularly Israeli behavioral modes. We find that under a conservative assumption concerning the infection rate, the cost of a life-year saved in Israel exceeds that inferred from the Israeli health-basket committee’s decisions on the inclusion of new medical technologies. Contrary to other countries, the Israeli government’s support of workers and businesses was raising uncertainty, as it was defined over shorter time spans, which were then extended from time-to-time. It seems that this served to deepen the crisis relative to that in benchmark countries that are similar to Israel in population size and human capital but characterized by higher per-capita GDP and lower poverty rates.