When and how do business shutdowns work? Evidence from Italy's first COVID-19 wave.

Governments around the world have adopted unprecedented policies to deal with COVID-19. This paper zooms in on business shutdowns and investigates their effectiveness in reducing mortality. We leverage highly granular death registry data for almost 5000 Italian municipalities in a diff-in-diff approach that allows us to mitigate endogeneity concerns credibly. Our results, which are robust to controlling for a host of co-factors, offer strong evidence that business shutdowns effectively curb mortality. We calculate that they may have reduced the death toll from the first wave of COVID-19 in Italy by about 40%. Our findings also highlight that timeliness is key - by acting 1 week earlier, their effectiveness could have been increased by an additional 5%. Finally, shutdowns should be targeted. Closing service activities with a high degree of interpersonal contact saves the most lives. Shutting down production activities, while substantially reducing mobility, only has mild effects on mortality.