Roughly 3 million people are currently not working due to fears of contracting Covid-19 or other infectious diseases, which has cost the U.S. economy hundreds of billions of dollars in the first half of the year alone, according to a new working paper from the National Bureau of Economic Research (NBER).

How Covid-19 has impacted the economy in 2022

In the working paper, researchers analyzed data from six waves of NBER's monthly Survey of Working Arrangements and Attitudes from February to July 2022. In total, 27,632 responses were collected from U.S. residents ages 20 to 64 whose income was at least $10,000 in 2021.

Overall, the researchers found that roughly 60% of respondents intend to practice "long social distancing," or continuing at least some forms of social distancing even after the pandemic. Thirteen percent of respondents said they had no plans to return to their pre-Covid activities, which the researchers called the "strong form" of long social distancing.

The intention to commit to this form of long social distancing declined sharply with education and income, but increased with age and was higher for women than men.

According to the researchers, the greater prevalence of pre-existing conditions and the increased risk of severe Covid-19 in some of these groups likely play a role in their desire to continue social distancing habits in the future.

"Those who haven't been infected but have seen a close friend or relative get hospitalized, get long Covid or have other bad outcomes are most likely to say they will be cautious in the future," said Jose Maria Barrero, one of the study's authors from the Instituto Tecnologico Autonomo de Mexico.

Across different industries, those who were in education were least likely to say they would continue a strong form of long social distancing and those in transportation and warehousing were the most likely. By occupation, individuals who had management, business, or financial roles were least likely, and those with roles in other personal services were most likely.

Among respondents who are currently outside the labor force, around 22% cited worries about catching Covid-19 or other infectious diseases as a reason why they are not currently seeking work. In total, roughly 2% of the total U.S. labor force, or 3 million people, did not work in the first half of 2022 due to fears of infection.

Accounting for the earnings of these 3 million individuals, the researchers estimated that the United States experienced an annual loss of around $250 billion in gross domestic product at current prices.

The long-term economic and social impacts of the Covid-19 pandemic

According to Bloomberg, many Americans have largely returned to their pre-pandemic lives, but Covid-19 will likely have long-term economic and societal impacts, particularly among those who are struggling with long Covid.

"People with a cautious bent or with underlying health conditions that place them at higher risk of death or serious illness from COVID-19 can find sound, understandable reasons to continue and even intensify their social distancing practices," the researchers wrote. "Long Social Distancing and its effects are likely to persist for many months or years."

In a recent report, the Brookings Institution estimated that between 2 and 4 million Americans have left the workforce due to long Covid, resulting in around $170 billion a year in lost wages. Separately, David Cutler, an economist from Harvard University, estimated that the total cost of long Covid reached $3.7 trillion.

Employers are also dealing with the impacts of the pandemic. According to a Mercer survey of more than 700 employers, many organizations, particularly large ones, are currently struggling with absences and disabilities due to Covid-19. Overall, 14% of the survey's respondents cited leaves of absence related to long Covid as a concern. (Boyle, Bloomberg, 10/25; Barrero et al., National Bureau of Economic Research, accessed 10/27)