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Non-pharmaceutical interventions adopted by governments to halt the spread of Sars-
Cov2 are thought to have non-trivial consequences for the economy. The purpose of
this paper is to estimate the economic impact of non-pharmaceutical interventions in
Italy, by taking advantage of timing differences in their implementation across regions.
To achieve this, we estimate one-way and two-way fixed effects models on a large
sample of Italian provinces. We also isolate a set of well-defined natural experiments in
which one region goes from a lower to a higher tier of restrictions, while a neighbouring
region remains in the lower tier, for which we can estimate difference-in-differences and
continuous treatment models. Moreover, in order to observe whether the impact of
restrictions has changed over time, we split the sample around December 2020 and
replicate the analysis in each subsample. Our case studies indicate that an Italian
province moving from tier 2 to tier 3 in the system of restrictions can expect a fall in
mobility of between 12 and 18 percentage points. Thus, we provide evidence of the
negative effects of non-pharmaceutical interventions on economic activity. Finally, we
provide some evidence that the effectiveness of NPIs in reducing mobility is likely to
reduce over time, which has important policy implications.
