Long COVID: A Tentative Assessment of its Impact on Labour Market Participation and Potential Economic Effects in the EU

Santiago Calvo Ramos, Joana Elisa Maldonado, Anneleen Vandeplas and Istvan Vanyolos

No 77, European Economy - Economic Briefs from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper provides a review of estimates of the prevalence of long COVID in the EU, and a tentative assessment of its economic impact, in particular on labour supply. This tentative approach yields an estimated prevalence of long COVID cases of around 1.7% of the EU population in 2021 and 2.9% in 2022, resulting in a negative impact on labour supply of 0.2-0.3% in 2021 and 0.3-0.5% in 2022. In person-equivalents, this means long COVID would have reduced labour supply by 364,000–663,000 in 2021 and by 621,000-1,112,000 in 2022, combining the effect of lower productivity, higher sick leaves, lower hours, and increased unemployment or inactivity. The lower bound of this range is close to a recent estimate put forward for the US (Abraham & Rendell, 2023). These figures imply that long COVID could have caused an output loss of 0.1–0.2% in 2021 and 0.2–0.3% in 2022. Available labour market data suggest a mixed picture when it comes to the impact of long COVID. Overall, the possible role of long COVID in the rising trend in sick leave, disability and activity-limiting health factors, warrants careful monitoring going forward, due to its potential impact on labour supply and labour productivity, and on public finances through increased social benefits, pensions, health care and long-term care expenditure.

Keywords: long COVID; economic impact; labour supply; EU output loss (search for similar items in EconPapers)
JEL-codes: E23 E24 I18 J01 J21 J22 O5 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2024-01
New Economics Papers: this item is included in nep-eec, nep-hea and nep-mac
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