The impacts of Covid-19 absences on workers *

We show that Covid-19 illnesses and related work absences persistently reduce labor supply. Using an event study, we estimate that workers with week-long Covid-19 absences are 7 percentage points less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons. Our estimates suggest Covid-19 absences have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average labor supply loss per Covid-19 absence equivalent to $9,000 in forgone earnings, about 90 percent of which reflects losses beyond the initial absence week.(c) 2023 Elsevier B.V. All rights reserved.

Automated summary

We find that Covid-19 illness and related work absences have a persistent negative impact on labor supply. Using an event study, we estimate that individuals who miss a week of work due to Covid-19 are 7 percentage points less likely to participate in the labor force one year later compared to similar individuals who do not miss work for health reasons. Our estimates suggest that Covid-19 absences have reduced the U.S. labor force by about 500,000 people (0.2 percent of adults) and result in an average loss of $9,000 in earnings per Covid-19 absence, with 90 percent of the losses occurring beyond the initial absence week.