Quotation Chen, Simiao, Prettner, Klaus, Kuhn, Michael, Bloom, David E. 2021. The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach. Journal of the Economics of Ageing.


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Abstract

Objectives To assess the economic burden of COVID-19 that would arise absent behavioral or policy responses under the herd immunity approach in the United States and compare it to the total burden that also accounts for estimates of the value of lives lost. Methods We use the trajectories of age-specific human and physical capital in the production process to calculate output changes based on a human capital–augmented production function. We also calculate the total burden that results when including the value of lives lost as calculated from mortality rates of COVID-19 and estimates for the value of a statistical life in the United States based on studies assessing individual’s willingness to pay to avoid risks. Results Our results indicate that the GDP loss associated with unmitigated COVID-19 would amount to a cumulative US$1.4 trillion by 2030 assuming that 60 percent of the population is infected over three years. This is equivalent to around 7.7 percent of GDP in 2019 (in constant 2010 US$) or an average tax on yearly output of 0.6 percent. After applying the value of a statistical life to account for the value of lives lost, our analyses show that the total burden can mount to between US$17 and 94 trillion over the next decade, which is equivalent to an annual tax burden between 8 and 43 percent. Conclusion Our results show that the United States would incur a sizeable burden if it adopted a non-interventionist herd immunity approach.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of the Economics of Ageing
WU-Journal-Rating new VW-D
Language English
Title The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach
Year 2021
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S2212828X21000219
DOI https://doi.org/10.1016/j.jeoa.2021.100328
Open Access N

Associations

People
Prettner, Klaus (Details)
External
Bloom, David E. (Harvard T.H. Chan School of Public Health, United States/USA)
Chen, Simiao (University of Heidelberg, Germany)
Kuhn, Michael (IIASA, Austria)
Organization
Department of Economics (Crespo Cuaresma) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
3911 Economics of the health system (Details)
5371 Macroeconomics (Details)
5404 Demography (Details)
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