Estimating US Earnings Loss Associated with COVID-19 Based on Human Capital Calculation

Infection with COVID-19 could result in lockdown, quarantine of contacts, absenteeism from work, and temporary productivity loss. This research aims to calculate (1) how the pandemic affects on-the-job probability and earnings for the working population, and (2) how much productivity loss is associated with self or a family member sick with COVID-19. Based on data collected from the U.S Research and Development Survey (RANDS), this research projects the relationship between on-the-job possibility and age of the index group and calculates the employment possibilities of the index group relative to the healthy group, namely the employment ratio. The weekly loss of productivity, presented by earnings, associated with COVID-19 for groups aged 18-44 years and 45-64 years was calculated, since the 18- to 64-year-old population is an economy's active workforce. Analytical results indicate that the older the age group, the lower the on-the-job possibility, and the higher the weekly productivity loss due to self or a family member being sick from COVID-19. For the group aged 45-64 years, the employment ratio of the index group relative to the healthy group dropped from 0.863 to 0.39, corresponding to a weekly productivity loss of 136-590 US dollars. The overall impact would be about a 9% loss in GDP. Infected or quarantined people would be confined to working in relatively isolated offices or places to allow for social distancing. Proactive health promotion in the workplace plus reactive work through telecommunication systems would reduce such losses. Such preparedness needs to be implemented early for more vulnerable workers who are of middle or old age and/or those comorbid with diabetes.