The Long-Term Impact of the COVID-19 Unemployment Shock on Life Expectancy and Mortality Rates
We adopt a time series approach to investigate the historical relation between unemployment, life expectancy, and mortality rates. We fit a Vector-autoregression (VAR) for the overall US population and for groups identified based on gender and race. We find that shocks to unemployment are followed by statistically significant increases in mortality rates and declines in life expectancy. 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 to be between 2 and 5 times larger than the typical unemployment shock, depending on race/gender, resulting in a 3.0% increase in mortality rate and a 0.5% drop in life expectancy over the next 15 years for the overall American population. We also predict that the shock will disproportionately affect African-Americans and women, over a short horizon, while white men might suffer large consequences over longer horizons. These figures translate in a staggering 0.89 million additional deaths over the next 15 years.
We thank Michael Boutros for great research assistance. We thank Dr. Nancy Berliner for critical reading and Dr. Ben Sommers for comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Giada Bianchi has received consulting fees from Karyopharm.