The Economic History of Pandemics

Abstract

COVID-19 has brought the attention to the study of past pandemics to ascertain if there are common trends across pandemics and what one might anticipate in the future. This chapter reviews pandemics through the lens of economic history to see their linkages with income, inequality, migration, and globalization. Pandemics tend to be supply-side shocks that depress incomes, either through lockdowns or mass mortality, by constraining the supply of labor. Pandemics also tend to increase inequality in the short run due to the disproportionate impact of economic and mortality dislocations on the poor. However, when mortality shocks have been large, the aftermath of the pandemic could also reduce inequality due to the rising bargaining power of scarce labor. Migrant flight from cities is one of the most stylized facts of pandemics, leading to supply-side disruptions and delayed economic recoveries. Globalization may not have caused more frequent pandemics, but the occurrence of a pandemic has often led to restrictions on the movement of people and slowed down globalization. The COVID-19 pandemic shares some of these features of past pandemics but also differs in its mortality profile, and hence, the economic repercussions also differ to some extent.