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Title: Firm behavior during an epidèmic [WP]
Author: Brotherhood, Luiz
Jerbashian, Vahagn
Keywords: COVID-19
Temps i comportament econòmic
Conducta organitzacional
Time and economic reactions
Organizational behavior
Issue Date: 2023
Publisher: Universitat de Barcelona. Facultat d'Economia i Empresa
Series/Report no: [WP E-Eco23/439]
Abstract: We derive a model in which firms operate in an epidemic environment and internalize infections among their employees in the workplace. The model is calibrated to fit the moments of the Covid-19 epidemic. We show that firms have incentives to fight against infections and can do so very effectively by increasing teleworking and rotating employees between on-site work, teleworking, and leave. The fight against infections in firms flattens the aggregate infections curve. Subsidies to teleworking reduce infections and save lives. Subsidies to sick leave reduce the cost of sick workers and raise workplace infections. Firms delay and weaken the fight against infections during economic downturns. We also consider the problem of a government that values output and lives. We show that the government prefers to severely restrict the epidemic by tolerating short-term output losses when it has a high valuation of life.
It is part of: UB Economics – Working Papers, 2023, E23/439
Appears in Collections:UB Economics – Working Papers [ERE]

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