Prof. Miklós Koren

Business Disruptions from Social Distancing

In a recent study, Miklós Koren and Rita Pető point out that social distancing interventions can be effective against epidemics but are potentially detrimental for the economy. Businesses that rely heavily on face-to-face communication or close physical proximity when producing a product or providing a service are particularly vulnerable. There is, however, no systematic evidence about the role of human interactions across different lines of business and about which will be the most limited by social distancing. The researchers provide theory-based measures of the reliance of U.S. businesses on human interaction, detailed by industry and geographic location. They find that, before the pandemic hit, 43 million workers worked in occupations that rely heavily on face-to-face communication or require close physical proximity to other workers. Many of these workers have lost their jobs since. Consistently with their model, employment losses have been largest in sectors that rely heavily on customer contact and where these contacts dropped the most: retail, hotels and restaurants, arts and entertainment and schools. Their results can help quantify the economic costs of social distancing.
Mr. Koren’s research fields are international trade, economic growth and industry dynamics. Through quantifiable models and detailed microdata, he studies how technology and talent jointly determine which businesses succeed. Most recently, his work focuses on the role of managers in improving firm productivity and accessing foreign markets. His mission is to help economists adopt best practices in coding so that they can maximize their scientific impact.
Miklós Koren is Professor of Economics at Central European University, Vienna, and senior Research Fellow at the Centre for Economic and Regional Studies (KRTK, Hungary). He is also the Data Editor of the Review of Economic Studies and Associate Editor of the Journal of International Economics, as well as CEPR Research Fellow. He holds a PhD in Economics from Harvard University, an MA in Economics from Central European University as well as an MSc in Economics from the Budapest University of Economics.