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The Macroeconomic Impact of Labor Force Loss Due to Long COVID

Author

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  • Masaya Yasuoka

    (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.

Suggested Citation

  • Masaya Yasuoka, 2025. "The Macroeconomic Impact of Labor Force Loss Due to Long COVID," Discussion Paper Series 290, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:290
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    More about this item

    Keywords

    Long COVID; Labor force losses; Ramsey model;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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