Susan Athey is a professor at the Stanford Graduate School of Business and a board member of Innovations for Poverty Action. Dean Karlan is a professor at Northwestern’s Kellogg School of Management and founder of Innovations for Poverty Action.
Our economy runs on mutual interdependence. As we spend time in self-isolation, let’s think about all the people who depend on us to make a living: the Lyft driver, the dry cleaner, the child-care provider, the barista at the coffee shop. As everything from sports games to evenings out with friends gets canceled because of covid-19, economic activity is grinding to a halt.
People are starting to practice not only social distancing but also economic distancing, which leaves a lot of people — especially the most economically vulnerable — in the lurch. It’s easy to feel powerless watching the human toll mount. What can we do to make a difference when we’re stuck at home, disconnected both socially and economically?
First, if your own income is secure, you can redirect funds you would have been spending on commuting, movies or restaurants to those who don’t have the privilege of a steady paycheck or stable housing. As schools, where up to 20 million needy kids get lunch, close and parents lose child care, and as workers lose their income, the most vulnerable families face immediate challenges meeting basic needs. Local charities that are picking up the slack need donations (cash, not goods) now more than ever. You can find local food banks and homeless services at ImpactMatters, which has identified high-impact organizations in 44 cities. Right now it’s vital that we create economic connections through the safety net in our communities.
Second, act globally. As bad as the coronavirus has been in wealthy countries, it will likely be much more devastating in poor countries that have worse health-care systems. In many places, social distancing is not even
an option. Imagine how quickly the virus may spread in a crowded refugee camp without adequate hygiene and sanitation.
Organizations such as the International Rescue Committee already have the infrastructure and expertise in place to help when covid-19 spreads through crowded refugee camps. Donating now can help them prepare and prevent further tragedies for those in refugee camps. A reputable medical charity such as Doctors Without Borders or Partners in Health can use donations to buy supplies and staff up for the pandemic.
What about a global charity that reduces economic distancing without increasing social distancing? GiveDirectly has a unique model, one quite appropriate for this context. They send money via mobile transfers directly (and quickly) to low-income households. And they are evidence-backed, having conducted several randomized evaluations with Innovations for Poverty Action to validate that the money goes to good use. Since the coronavirus cannot be transmitted over the phone, it’s the perfect socially distant/economically close charity for the occasion.
Third, think about other ways you may be economically distancing yourself in your daily life. You can try to reverse or make up for it, if you can afford to. If you go to a restaurant or coffee shop and notice how empty it is, you can leave a large tip. If you have a house cleaner, tutor for your child or anyone else you don’t need services from now, consider continuing to pay them, if you can. If you aren’t dry cleaning clothes for work, but always meant to get the curtains or tablecloths cleaned, now’s probably a good time if you want your cleaners to still be in business when our normal routine resumes. These may seem like small actions, but they add up (and right now they are adding up in the wrong direction).
Obviously not everyone has the luxury to take these actions right now. But those who have the means to weather the storm can help reduce the economic impact on those who do not. Even at a time when you may be physically more isolated than ever before, you can maintain economic connection to those who rely on you, and create new connections to people from around the world who need your help.