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

Author

Listed:
  • Santiago Calvo Ramos
  • Joana Elisa Maldonado
  • Anneleen Vandeplas
  • Istvan Vanyolos

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.

Suggested Citation

  • Santiago Calvo Ramos & Joana Elisa Maldonado & Anneleen Vandeplas & Istvan Vanyolos, 2024. "Long COVID: A Tentative Assessment of its Impact on Labour Market Participation and Potential Economic Effects in the EU," European Economy - Economic Briefs 077, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecobri:077
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    More about this item

    Keywords

    long COVID; economic impact; labour supply; EU output loss;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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