According to a new study released Monday, illness caused by Covid-19 has reduced the labor force in the United States by approximately 500,000 people, a hit that is likely to continue if the virus continues to sicken workers at current rates.
During the pandemic, millions of people left the labor force (the number of people working or looking for work) for a variety of reasons, including retirement, a lack of child care, and fear of Covid. In August, the labor force totaled 164.7 million people, surpassing the February 2020 prepandemic level for the first time. According to the study’s authors, economists Gopi Shah Goda of Stanford University and Evan J. Soltas of the Massachusetts Institute of Technology, the labor force would have 500,000 more members if Covid had not sickened people.
If Covid infection rates remain unchanged, we expect the 500,000-person loss to continue until either exposure or severity decreases,” Mr. Soltas said. That assumes that some of those who were previously ill return to work.
According to Aaron Sojourner, an economist at the World Economic Forum, the authors “provide the most credible evidence to date about labor-market impacts for a large set of workers.” The study was not conducted by the Upjohn Institute for Employment Research.
The study, which has not yet been peer-reviewed, was based on a representative sample of more than 300,000 workers who were followed in the Census Bureau’s monthly household survey for 14 months. The investigation lasted from January 2010 to June 2022. The authors used weeklong absences for medical reasons as a proxy for likely Covid illnesses. From March 2020 to June 2022, approximately 10 workers per thousand missed a week of work due to health reasons, up from six workers per thousand in the decade preceding the pandemic.
The economists discovered that people who missed work for a week due to personal health issues were about 7 percentage points less likely to be in the labor force one year later than similar workers who did not miss work for personal reasons.
This equated to a 0.2 percentage point drop in labor-force participation, or the proportion of adults working or looking for work. In August, the rate was 62.4%, down one percentage point from February 2020.
However, this estimate is conservative because it excludes anyone who was not working at the start of the survey but would have been if not for illness, as well as those whose absences occurred outside of the week in which the Census conducted its monthly survey. Accounting for these, economists estimate that the labor-force decrease would be around 750,000 people, corresponding to a 0.3 percentage point drop in participation. The study also did not look at the outcomes of those who missed work to care for family members who were sickened by Covid, or those who missed less than a week of work due to illness.
Many economists see the slow recovery of the nation’s workforce, combined with high demand for workers, as one of the country’s major challenges, limiting many employers’ ability to provide goods and services and contributing to price pressures. They argue that correcting this imbalance is critical to lowering high inflation.
Longer-term economic growth is dependent on an expanding labor force and rising productivity. A slow-growing labor force means fewer people to build cars and wait tables, potentially limiting the economy’s growth potential.
Ms. Goda said that the analysis reflected the broad health consequences of Covid-19 illness, including so-called long Covid, a condition in which people who have had a probable or confirmed case of Covid experience lingering symptoms weeks, months or as much as a year after infection. Brain fog, shortness of breath, and extreme fatigue are all possible symptoms. According to studies and estimates from governments, hospitals, universities, and doctors, between 10% and 30% of people infected develop long Covid.
Stuart Smith, 62, believes he contracted Covid in the early stages of the pandemic while traveling from his home in Oregon to a conference in Nashville, Tennessee. He struggled with respiratory and other symptoms, and said he often had to sit down and rest for five to 10 minutes while walking up the flight of stairs to his bedroom. “I was completely exhausted. “I had no energy,” he admitted.
The symptoms remained. Still, he continued to work at his job as a lawyer and consultant for a year and a half, thanks partly to some changes his firm made, such as finding someone to take notes during his meetings and write up summaries. But he hit a brick wall last October. “I walked into the office, sat down in my chair and said, ‘I just can’t do this anymore. ‘I don’t have the physical or mental strength.’
Mr. Smith resigned from his job and has since done pro bono legal work and consults for his former employer a few hours per month.
“I figured I’d work until I was 67 or 70 because I enjoyed it,” he explained. “Now I don’t know if I’m retired or what. I’m in this very strange no man’s land of not really having a name to put on it. I’m not a full-time employee, I do a little work, but I don’t know if I’ll still be working next week or next month.”