Long COVID and the Economy: Interview with Economist David Cutler

Dec 7, 2022

By Tamsin Zandstra

This piece has been informed by an interview with David Cutler, Otto Eckstein Professor of Applied Economics at Harvard University.

To what extent do we understand the impact of Long COVID on the economy? What needs to happen for us to better understand its economic impact?

As of now it is not possible to fully know the economic impact of Long COVID. We still do not have a great handle on how many people have Long COVID and for how long they are affected which makes it challenging. There is some data from the United Kingdom and household studies in the United States however, the data from the United States is only an estimate based on small sample sizes making it a challenge to understand the full impact. 

What do you think is the most detrimental impact that Long COVID has made on the economy?

There are three main areas where Long COVID has been most detrimental. Firstly people are less healthy which leads to economic loss but not monetary loss. Secondly, fewer people are working. Those that are working are less productive, often working less hours which impacts the economy. Thirdly, there is a great deal more money that has to be spent on medical care, resources which would be put elsewhere was the money not being spent on Long COVID. I believe that the cost of Long COVID will be around $3.5 trillion in health costs, lost earnings and medical spending. 

To what extent has Long COVID impacted the labor force? In what ways? Do you think it has contributed to shortages and supply chain interruptions? How do we know?

Long COVID is absolutely impacting the labor force for example in hospitals they are struggling to hire nurses and service firms are struggling to hire employees. This is leading to supply chain disruption and rising prices. The economy cannot recover until we can bring people back into work and increase labor supply. 

Should people care about Long COVID, from an economic standpoint, even if they do not have it themselves? What should they do about it?

First of all, we should all care about Long COVID as we should care about our fellow citizens and their health. From an economic standpoint Long COVID is leaving us with an economic loss which we are all paying for through money being invested in medical care and services that people with Long COVID are using as part of their recovery. Long COVID is also reducing the workforce and the reality is that the more people that are working the better as this creates economic activity and gives the public access to services, experiences and products. 

What is the best way to measure the healthcare costs associated with Long COVID apart from examining claims data and electronic health records?

It is hard to know the true economic cost of Long COVID but we can look at other similar conditions such as Myalgic encephalomyelitis/chronic fatigue syndrome to gain an estimate for the cost of the disease. 

In your research, which socio demographic subgroups have suffered the most financially because of COVID-19 and do you think Long COVID mimics this pattern? What do you think can be done to rectify this inequity? 

There is a great deal of inequality associated with Long COVID. Racial minorities and lower income individuals are some of those more at risk. People with more public facing jobs who had to work in person throughout the pandemic, often with little access to PPE have been more at risk of catching COVID-19 and subsequently developing Long COVID. Such individuals also often face more challenges when trying to recover from Long COVID as maintaining their jobs and working standing up for hours with few breaks is not always possible or extremely challenging when you are suffering with chronic fatigue and/or brain fog. 

To what extent has the economy been able to recover since the initial impact of the pandemic? 

The economy has been able to recover since the start of the pandemic, especially as businesses have reopened since the end of the lockdown and unemployment rates have dropped. There are still challenges with a shortage of workers and inflation exacerbated by COVID. It is hard to know how long it will take to recover as there is limited data on exactly how many people are out of work and when people will return to work especially if they are suffering from Long COVID. Furthermore, employers need to make workplace accommodations to support employees suffering from Long COVID. 

For how long do you think Long COVID will have a significant economic impact?

It is difficult to know at this point but Long COVID affects people for around 5 years on average so as more people recover and our medical knowledge advances hopefully there will be a gradual decline in the economic impact over the next couple of years. 

What, if any, economic policy has the government developed in response to Long COVID, at either the federal or state level? Is this response effective? What more can be done?

There has not been any direct policy so far focused on Long COVID and there is a lack of coherent strategy. The Biden administration has clarified that people with Long COVID are entitled to disability; however the process of enrolling people and distributing benefits has been alarmingly slow. 

Are there other countries that have implemented effective economic policy in response to Long COVID that the US could learn from? What have they done?

There are very few countries with any direct Long COVID policy and all countries are dealing with issues of inflation. Many other countries have more lax worker rules which makes it easier to claim disability however, many countries are facing similar challenges. The main focus globally for workers needs to be making accommodations so workers can be more productive. 

At this point, what are the main questions on your mind regarding the economic impact of Long COVID?

The main questions are;

How do we accommodate people who are impaired to be able to work?

Can we develop treatments and effective care for those with Long COVID?

How can employers accommodate employees suffering from Long COVID? Is there a general understanding among employers for how to best support employees, their medical and financial needs? Is there an understanding of the financial impact of Long COVID?

Employers need to work to increase health benefits, relax work hours, relax working conditions and help support employees on a worker by worker basis. Long COVID is so individual and everybody has a unique experience so making accommodations based on people’s personal circumstances is necessary. 

For inquiries related to the Long COVID Initiative, please contact long_covid_initiative@brown.edu