Wealthier districts were hit by Covid-19 first in Germany, but their lockdowns were more effective

Thomas Plümper, Eric Neumayer 11 June 2020

a

A

Does Covid-19 necessarily harm (and kill) primarily the poorer groups in society? Or is it a ‘rich man’s disease’, as many citizens in poorer countries believe it to be?

Media coverage of the virus suggests that poor neighbourhoods in the US and the UK are the hardest hit. The Guardian (2020a) suggests that the epidemic hits poorer regions of the UK at twice the rate of richer regions. The same newspaper reports that in the US, poor, mostly black neighbourhoods are being affected most, “where a nexus of intergenerational poverty, a greater prevalence of underlying health conditions, and less access to healthcare are certain to have more pronounced consequences for the black community as the virus proliferates” (The Guardian 2020b). Two academic studies from the US support the hypothesis of the socially regressive nature of the pandemic (Han et al. 2020, Harris 2020).

Yet, the relationship between poverty and Covid-19 is more complex than the Anglo-Saxon experience suggests. Our recent research analysing the distribution of Covid-19 across districts in Germany shows that the socio-economic stratification of the pandemic depends on how the virus first entered a country, and on which stage of the pandemic a country is in (Plümper and Neumayer 2020). The initial distribution of infections in each country is strongly influenced by who brings the virus into the country in such significant numbers that governments are no longer able to suppress the onward spread. This can be migrant workers, high- or low-end tourists, business travellers, students, or any other kind of visitors from abroad who (often unknowingly) were infectious and carried the virus across international borders.

Phase one of the pandemic: Richer districts hit hardest

In Germany, the virus entered the country in significant and uncontrollable numbers in a way that meant rich people and wealthier districts were hit hardest first. What matters is not the first entry of the virus into the country per se, but the first entry that is out of control. In Germany, the first entry was controlled but a second wave of imported infections quickly spiralled out of control.

The virus was first uncovered among staff of a company called Webasto, introduced by a business partner from Shanghai who visited the company headquarters in Bavaria between 19 January and 22 January 2020. This led to at least 16 infections, which were quickly isolated. Infected individuals were quarantined, and the virus did not spread further (Günther et al. 2020).

A little more than a month later, like in many other European countries, infections rose sharply and could no longer be suppressed. The predominant way in which the virus entered Germany was via tourists returning from their skiing holidays in the Alps. Some hold the small Austrian town of Ischgl responsible for roughly half of the initial distribution of infections not only in Germany (Felbermayer et al. 2020) but within several other European countries (BBC 2020). In addition, a small number of ‘super-spreader’ events that took place in various German regions contributed to the by now uncontrollable spread of the disease. These events like carnivals and beer and wine festivals created several local virus hotspots.

Ski holidays in foreign countries are expensive. Only the relatively well-off can afford such a luxury, and geographical proximity to the Alps provides easier access for German holidaymakers.  Accordingly (and in stark contrast to the US and the UK), the coronavirus pandemic started off in Germany predominantly as a ‘rich man’s disease’, affecting wealthier districts more than poorer and socially deprived districts: the richer South more than the North, and the richer West more than the East.

Phase two of the pandemic: Socioeconomic advantage turns into a safety advantage

This pattern of socioeconomic stratification started to change as the dangers of the virus crystalised. People started to reduce their social life, adopting social distancing measures. Some states like Bavaria pressed ahead, followed soon after by a national lockdown (imposed by the federal government on 22 March 2020).

  

Social distancing and lockdown had a noticeable effect on the dynamics of the pandemic in Germany, which is to be expected given its relatively large share of elderly people, low average temperature, and its strong health system (Deb et al. 2020). New infections begun to decline on 2 April 2020, the number of active cases begun to drop on 6 April 2020, and the mortality rate started to decrease on 17 April 2020.

Further, social distancing policies slowly but significantly changed the socio-economic stratification of Covid-19. In this second phase of the pandemic, the ability to socially distance oneself becomes the main driver of the further spread of the disease. White collar workers can work from home, while others still need to commute to their workplace. Poorer people have to rely on public transport to go to work, richer people are more likely to own cars. Poorer people cannot shield themselves as easily as richer people since they do not have the same economic resources to weather the economic damage imposed by the lockdown. In the second phase of the pandemic, under conditions of government- and self-imposed social distancing, the spread of the virus becomes increasingly socially regressive.

Figure 1 plots new infections divided by old infections against the taxable income per capita. The area of each district is equivalent to the number of infections in phase one. The figure shows that richer districts initially had more infections (indicated by the size of the area) and generally have a ratio of new infections to initial infections of less than one. All the districts that have a relatively large ratio of new to initial infections have a relatively low taxable income per capita.

Figure 1 New infections and taxable income

In a regression analysis, we found that (controlling for the path dependency introduced by the initial stock of infections) new infections per capita after the first phase of the pandemic is over are statistically significantly lower in wealthier German districts (Plümper and Neumayer 2020). They are also lower in districts with a higher share of university-educated workers, a proxy for the ability to work from home (Dingel and Neiman 2020), even after controlling for wealth. By contrast, the initial safety advantage that more socially deprived districts had in the first phase of the pandemic disappears during this second phase.

Conclusion

The pandemic started out as a ‘rich man’s disease’ in Germany. However, the social stratification of Covid-19 changes significantly across the two phases of the pandemic. In the first phase, socioeconomic advantage happened to provide a safety disadvantage. In the second phase, socioeconomic advantage turns into a safety advantage instead. It is not the virus per se that affects the poor more than the rich. When infections are initially low, their spread depends on the way in which the virus entered a country in significant and uncontrollable numbers, as well as following from the weak understanding of risks which means that most people do not yet change their behaviour (whether richer or poorer areas have higher infection rates). It is the ability to take effective measures against the risk of infection that distinguishes the rich from the poor in the second phase of the pandemic.1 Even if the virus initially begun as a ‘rich man’s disease’, in the second phase the hotspots of new infections slowly move from wealthier to poorer areas. As of now, the pandemic has truly reached the very poor. Workers in slaughterhouses, in mail distribution centres, and agency workers have the highest propensity to get infected.

Without additional analyses of other countries’ experiences, we cannot know for sure. Nonetheless, we suspect that our finding for Germany regarding the socially regressive nature of new infections in the second phase of the pandemic (when social distancing kicks in) holds for other countries too. By contrast, the initial highly uneven distribution of SARS-CoV-2 infections observed across countries depends on how the virus first entered a country in significant and uncontrollable numbers. In countries in which the virus either starts off as (or very quickly develops into) a poor man’s disease, the social imbalance of its effects will naturally be larger and felt faster. It follows that the longer the pandemic lasts, the more the disease becomes socio-economically stratified.

References

BBC (2020), “Ischgl Resort at Heart of Europe’s Outbreak Reopens”, 23 April.

Bernett-Howell, Z and A M Mobarak (2020), “The value of social distancing is not equally distributed”, VoxEU.org, 07 May.

Deb, P, D Furceri, J D Ostry and N Tawk (2020), “The effect of containment measures on the COVID-19 pandemic”, VoxEU.org, 05 June.

Dingel, J and B Neiman (2020), “How Many Jobs can be done at Home?”, VoxEU.org, 07 May.

Felbermayr, G, J Hinz and S Chowdhry (2020), “Après-Ski: The spread of Coronavirus from Ischgl through Germany”, Kiel, working paper.

Günther, C, M Günther and D Günther (2020), “Tracing Contacts to Control the Covid-19 Pandemic”, arXiv.org.

Han, Y, V O Li, J C Lam, P Guo, R Bai and W W Fok (2020), “Who is more susceptible to Covid-19 infection and mortality in the States?”, MedRxiv.org.

Harris, J E (2020), “The Subways Seeded the Massive Coronavirus Epidemic in New York City”, NBER Working Paper 27021.

Plümper, T and E Neumayer (2020), “The COVID-19 Pandemic Predominantly Hits Poor Neighborhoods, or does it? Evidence from Germany”, MedRxiv.org.

The Guardian (2020a), “Poverty kills people: after coronavirus we can no longer ignore it”, 05 May.

The Guardian (2020b), “'A perfect storm': poverty and race add to Covid-19 toll in US deep south”, 12 April.

Endnotes

1 Barnett-Howell and Mobarak (2020) have recently suggested that poorer countries have fewer incentives to go into a strict lockdown, because the population is younger and the opportunity costs higher. We find a similar logic on the national level: the poor should support a national lockdown significantly less than the rich because the poor have fewer health advantages from a lockdown and bear relatively larger economic costs. 

a

A

Topics:  Covid-19 Europe's nations and regions

Tags:  COVID-19, Europe, coronavirus, Germany, EU, UK, US, Inequality

Professor of Quantitative Social Research, Vienna University of Economics

Pro-Vice Chancellor Planning and Resources and Professor of Environment and Development, LSE

Events

CEPR Policy Research