Scarred but Wiser: World War 2’s COVID Legacy
The paper formalizes and tests the hypothesis that greater exposure to big shocks induces stronger societal responses for adaptation and protection from future big shocks. We find support for this hypothesis in various strands of the literature and in new empirical tests using cross-country data on deaths due to COVID-19 and deaths during World War 2. Countries with higher death rates in the war saw lower death rates in the first wave of the COVID pandemic, though the effect faded in the pandemic’s second wave. Our tests are robust to a wide range of model specifications and alternative assumptions.
The authors thank Branko Milanovic for discussions and Toan Do, Ivan Torre and Dominique van de Walle for their comments. This paper’s findings, interpretations, and conclusions are entirely those of the authors and do not necessarily represent the views of their employers including the World Bank, its Executive Directors, the countries they represent, or the National Bureau of Economic Research.