DP15605 The Long-Term Impact of the COVID-19 Unemployment Shock on Life Expectancy and Mortality Rates

Author(s): Francesco Bianchi, Giada Bianchi, Dongo Song
Publication Date: December 2020
Date Revised: April 2021
Keyword(s): COVID-19, Life Expectancy, Mortality, Unemployment rate
JEL(s): C32, E32, I14, J11
Programme Areas: Public Economics, Monetary Economics and Fluctuations
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15605

We adopt a time series approach to investigate the historical relation between unemployment, life expectancy, and mortality rates. We fit Vector-autoregressions for the overall US population and for groups identified based on gender and race. We use our results to assess the long-run effects of the COVID-19 economic recession on mortality and life expectancy. We estimate the size of the COVID-19-related unemployment shock to be between 2 and 5 times larger than the typical unemployment shock, depending on race and gender, resulting in a significant increase in mortality rates and drop in life expectancy. We also predict that the shock will disproportionately affect African-Americans and women, over a short horizon, while the effects for white men will unfold over longer horizons. These figures translate in more than 0.8 million additional deaths over the next 15 years.