The Macroeconomic Impact of Labor Force Loss Due to Long COVID

Masaya Yasuoka

No 290, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper examines how labor force losses caused by taking leave or resigning due to long COVID affect the macroeconomy. The analysis yielded the following results. First, a simulation analysis was conducted using a model that does not take unemployment into account. It was found that a 3% loss in the labor force leads to a 2% decrease in Gross Domestic Product (GDP). Furthermore, even when the degree of labor force loss is reduced, it takes a longer time for GDP to return to its original level. Similarly, when frictional unemployment is taken into account, it was found that even after the labor force recovers, it still takes a longer time for GDP to return to its pre-loss level.

Keywords: Long COVID; Labor force losses; Ramsey model (search for similar items in EconPapers)
JEL-codes: E24 H20 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2025-04
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