The financial and wellbeing costs of isolation can be very high.
Viruses like Covid-19 are spread by human contact. Reducing human contact therefore reduces the number of coronavirus cases, which is why many governments have placed restrictions on where and when people can go out, and who they can mix with. However, these sort of society-wide lockdowns are really damaging from both an economic and wellbeing perspective: people can’t go to work, see their loved ones, or spend money on their high streets.
These negative effects would be much reduced if only the people who actually had the disease had to reduce human contact while everyone else carried on as normal. So that’s what lots of countries, including the UK, are now trying to do. The British government has announced it will provide England residents with two tests a week with the idea that people will isolate themselves for ten days if they (a) test positive or (b) had close contact with someone who tested positive.
However, a similar scheme which asked people to self-isolate if they or their contacts developed Covid symptoms found that only about half of Brits actually complied. And while it is probable that the ‘officialness’ of a test result will boost compliance (about 9 in 10 people apparently obey isolate notifications from the NHS Test and Trace App) it also seems likely that many people who do not want to isolate themselves will respond by declining to take a test in the first place.
When people aren’t following their rules, governments can try to persuade people via a carrot or a stick. So far, the UK government has gone mainly for the stick (there’s a £10,000 fine if you don’t isolate) and a little bit for the carrot (people already on benefits can get £500 for isolating). The general consensus is that both are currently quite ineffective at changing behaviour.
The isolation fine is spottily enforced, encouraging people to chance it. There’s also no fine for not taking a test, upping the likelihood that people who want to go out will just avoid being tested. Meanwhile, the £500 is only available to a small minority of the population, is far below minimum wage and is difficult to claim even if you are eligible.
The government could respond by becoming more punitive or more generous, although both would require dedicating more resources - such as police officer time or government revenue - to the scheme. It would therefore need to be balanced against the benefits of using these same resources elsewhere, for example on tackling knife crime or giving NHS staff a payrise.
Read our explainer on: externalities
