Assessment of the impact of Long COVID on labour market participation and potential economic effects in the EU

Abstract This paper estimates the economic cost of long COVID through its direct impacts on the labour market. The direct implications of long COVID for affected individuals concern their capacity to work, and their productivity at work. Some individuals might continue to work, but at a lower productivity level, some might reduce their hours worked, including as a result of temporary absences, and some might stop working at all. To the best of our knowledge, so far, no study has explicitly addressed the impact of long COVID on the EU labour market. The present paper provides a tentative assessment using available estimates from surveys, clinical follow-up studies and model simulations of the prevalence of long COVID. This tentative approach yields an estimated 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). 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.