The Economics of Masks... "66,000 Won Daily Economic Effect"

Analysis by UK Economist
One American Wearing a Mask for a Day
Can Prevent a $56.14 Decrease in US GDP

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] As the novel coronavirus infection (COVID-19) rapidly resurges domestically and local governments mandate mask-wearing, claims have emerged overseas that mask-wearing can actually lead to economic benefits. Recently, concerns about COVID-19 have grown in Korea, prompting discussions about raising social distancing to level 3. Attention is focused on whether simply enforcing mask-wearing can achieve both epidemic control and economic benefits.

On the 25th (local time), the British publication The Economist stated, "Many people wonder how economically effective wearing masks is," and added, "Our own estimates show that if one American wears a mask for a day, it can prevent a $56.14 decrease in the US Gross Domestic Product (GDP)." Considering that the US annual real GDP is $20 trillion and the population is about 300 million, even a simple calculation shows the significant economic effect.

Furthermore, The Economist suggested that "mask-wearing can replace lockdown measures." Wearing masks means there is no need to be overly concerned when using public transportation, and more stores and offices can reopen.

Additionally, it advised that the government should mandate mask-wearing and impose high fines on citizens caught not wearing masks. It also mentioned that the government could consider distributing masks for free while enforcing the mandate. Turkey and the Tuscany region of Italy have already encouraged mask-wearing by distributing masks free of charge to citizens. The Economist emphasized, "Although distributing masks to citizens costs money, considering that a thin mask costs about 50 cents, the economic benefits gained from this investment are very large."

Last month, Goldman Sachs also reported that if mask-wearing were mandated nationwide in the US, economic benefits equivalent to 5% of GDP could be expected. Goldman Sachs estimated, "If mask-wearing is mandated, the proportion of people who always or frequently wear masks will increase by about 25 percentage points within 30 days after implementation," and through this, the increase in new infections could be reduced to the level of lockdown measures. Goldman Sachs further explained that nationwide mask mandates would reduce the daily new infection growth rate from 1.6% to 0.6%, and to achieve such effects through lockdown measures, a 5% GDP decrease would have to be endured.