Resilience to health shocks and the spatial extent of local labour markets: evidence from the Covid-19 outbreak in Italy

Abstract

In addition to the general issue that fewer interpersonal contacts reduce the speed of contagion, less attention has been paid to the spatial configuration of such contacts. In Italy, Covid-19 severely affected the most industrialized area of the country, where the network of commuting flows is particularly dense. We investigate the relationship between workers' mobility and the diffusion of the disease by computing, for each municipality, the intensive and extensive margins of commuting flows and by measuring excess mortality over the period January-May 2020. We find that if commuting patterns were 90% of those observed in the data, Italy would have suffered approximately 2300 fewer fatalities during the first pandemic cycle.