COVID-19 Cut U.S. Workforce by About 500,000: Researchers

Two economists say COVID-19 has pushed hundreds of thousands of people out of the U.S. workforce, but probably not millions.

In a new working paper based on federal Current Population Survey data, Gopi Shah Goda of Stanford and Evan Soltas of MIT suggest that lingering health problems related to the pandemic caused about 340,000 to 590,000 people to leave the U.S. workforce between early 2020 and June of this year.

If COVID-19 continues to have roughly the same impact, it will reduce the U.S. workforce participation rate by about 500,000 workers, or 0.2 percentage points, in a typical year, and lead to the loss of about $62 billion in labor supply value per year, the economists predict.

Some other teams have used less direct means to calculate that COVID-19 might have cut the U.S. labor supply by as many as 1.5 million people.

What It Means

COVID-19 has pushed many US. workers out of the workforce earlier than they had expected and saddled them with complicated financial planning needs.

Whether the number is 500,000 or closer to 1 million, those clients and prospects are likely to have lower savings than other retirees and more need for help with matters such as buying income annuities and managing streams of public and private disability insurance benefits.