The Economic Impact of the Wisconsin Supreme Court Ruling Invalidating the State’s Safer at Home Order

Junjie Guo

Executive Summary:

In a 4-3 ruling, the Wisconsin Supreme Court invalidated the state’s Safer at Home order on May 13, 2020, allowing most non-essential businesses to open immediately in most locations. Using several real-time measures, I find broad evidence suggesting a positive impact of the Supreme Court decision on economic activity. From May 13 to May 27, relative to states where non-essential businesses were shut down, Wisconsin experienced a larger increase in the number of small businesses open (7.8 ppts), net revenue for small businesses (4.6 ppts), employment of low-income workers (0.8 ppts), earnings of low income workers (1.6 ppts), individual mobility as measured by GPS data on time spent outside residential locations (3.2 ppts) and consumer credit/debit card spending (3.1 ppts). The impact appears to be larger for sectors closely related to accommodation and food services. However, because these sectors were hit especially hard initially, the gap in year-over-year activity for these sectors was still larger than the gap for the overall economy two weeks after the Supreme Court decision.

Qualitatively, the evidence suggests the state’s Safer at Home order was binding, and its invalidation contributed to economic recovery. Quantitatively, the impact is not very large, reducing the initial gap in year-over-year activity on May 13 by less than a quarter for majority of the economic measures, and the responses from households seem to be slower and smaller than firms. Overall, the evidence suggests a modest role of the Safer at Home order on economic activity, consistent with my previous analysis of the initial impact of the order’s implementation as well as similar analyses by others.

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