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Long Covid and the Labor Market

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Bryce Covert’s work is always worth reading and that includes her new piece on the connections between long Covid and the tight labor market.

One international online study of nearly 4,000 long COVID patients found that 22 percent had left the workforce due to their symptoms. Here in the United States, economists have been trying to pinpoint a more robust answer with different datasets. One is the Census Bureau’s Current Population Survey. It’s a well-respected dataset: it’s nationally representative, and it also has a long history, allowing researchers to compare trends over time.

In a recent paper, Gopi Shah Goda, deputy director of the Stanford Institute for Economic Policy Research, and Evan Soltas, a PhD economics student at MIT, looked at how many more health related work absences were reported in the CPS in the pandemic compared to the years before, using that as a proxy for people who got COVID. They found that workers who had to miss work for at least a week when they got COVID were 7 percentage points less likely to be in the labor force a year later compared to those who hadn’t had such a disruption.

Thus, they concluded, COVID illness had reduced the labor force participation rate by 0.2 percentage points by June, meaning there were about 500,000 fewer people working. “That does explain a pretty substantial chunk of the reduction in labor force participation since the beginning of the pandemic,” Shah Goda noted, and could be a big reason for why the labor market is so tight. “It’s maybe not the whole story, but it’s still something that’s relatively substantial.” The labor force losses will cost the economy about $62 billion a year, they calculate. “COVID is basically half as costly to the U.S. economy as diabetes or all cancers,” Soltas noted.

But not all of what they observed could be attributed to long COVID: their findings include those who got sick with COVID and quickly recovered, but perhaps lost their job when they had to take time off or saw it as a good catalyst to retire, as well as those whose symptoms lingered. “Long COVID is certainly, we think, in the mix here,” Soltas said. But it’s not the only phenomenon they measured.

A different analysis has come to a different conclusion. In a recent report, Louise Sheiner, senior fellow at the Brookings Institution, and Nasiha Salwati, senior research assistant, found an extra 3 million people reported having a disability in the CPS during the pandemic as compared to 2017-2019. They then compared the labor force participation rate of those with disabilities to what it would have been had the pandemic never happened. They found a much smaller impact: that there were somewhere between 281,000 and 562,000 people with disabilities who left the labor force during the pandemic, or a reduction of somewhere between 0.2 and 0.4 percent. And, of course, not all of those people have long COVID — so that particular impact may be smaller.

I’d say that it is generally hard to say just what the impact is here, but I think we know enough to say there is some kind of impact and that it is question worthy of continued study.

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