Covid-19 illnesses are keeping at least 500,000 workers out of US labor force

Photo: Reuters
Photo: Reuters


Virus will weigh on workforce if infection rates continue, authors predict

Illness caused by Covid-19 shrank the U.S. labor force by around 500,000 people, a hit that is likely to continue if the virus continues to sicken workers at current rates, according to a new study released Monday.

Millions of people left the labor force—the number of people working or looking for work—during the pandemic for various reasons, including retirement, lack of child care and fear of Covid. The total size of the labor force reached 164.7 million people in August, exceeding the February 2020 prepandemic level for the first time. The labor force would have 500,000 more members if not for the people sickened by Covid, according to the study’s authors, economists Gopi Shah Goda of Stanford University and Evan J. Soltas, at the Massachusetts Institute of Technology.

“If we stay where we are with Covid infection rates going forward, we expect that 500,000-person loss to persist until either exposure goes down or severity goes down," said Mr. Soltas. That assumes that some of those previously sickened eventually return to work.

The authors “provide the most credible evidence to date about labor-market impacts for a large set of workers," said Aaron Sojourner, an economist at the W.E. Upjohn Institute for Employment Research, who wasn’t involved in the study.

The study, which hasn’t yet been peer-reviewed, was based on a representative population of more than 300,000 workers followed over 14 months in the Census Bureau’s monthly household survey. The analysis covered the period from January 2010 to June 2022. The authors used health-related, weeklong absences as a proxy for probable Covid illnesses. From March 2020 to June 2022, approximately 10 workers per thousand missed a week of work due to health reasons, on average, up from six per thousand on average over the decade before the pandemic.

The economists found that people who experienced weeklong absences due to their own health problems were about 7 percentage points less likely to be in the labor force one year later than similar workers who didn’t miss work for health reasons.

That translated to a 0.2 percentage-point reduction in the labor-force participation rate, or the share of adults holding or seeking jobs. The rate was 62.4% in August, down 1 percentage point from February 2020.

This estimate is conservative, however, in that it excludes anyone who wasn’t working at the survey’s outset but who would have become employed if not for illness, as well as those whose absences fell outside of the week during which the Census conducted its monthly survey. Accounting for these, the economists estimate the labor-force decrease would be around 750,000 people, equal to a reduction in participation of about 0.3 percentage point. The study also didn’t analyze outcomes for those missing work to care for family members sickened by Covid, nor those who missed less than a week of work due to health, nor those who died of Covid.

Many economists see the nation’s workforce’s slow recovery combined with the high demand for workers as among the U.S. economy’s key challenges, restraining many employers’ ability to provide goods and services and contributing to price pressures. Fixing this imbalance, they say, will be essential to lowering high inflation.

In the longer term, economic growth depends on an expanding workforce and rising productivity. A slow-growing labor force means fewer people than otherwise to build cars and wait tables, which could restrain 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. Symptoms can include brain fog, shortness of breath and extreme fatigue. Between 10% and 30% of people infected develop long Covid, according to studies and estimates from governments, hospitals, universities and doctors.

Stuart Smith, age 62, believes he was infected with Covid in the very early days of the pandemic after traveling from his home in Oregon to a conference in Nashville, Tenn. 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 totally winded. I had absolutely no energy," he said.

The symptoms persisted. 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 last October, he hit a wall. “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 ability.’ "

Mr. Smith left his job, and since then he has done some pro bono legal work and consults for his former employer a few hours a month.

“I figured I’d work till I was 67 or 70 because I more or less enjoyed it," he said. “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."


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