Help My Career: People are ‘long social distancing’ due to COVID-19. Economists say that’s contributing to a drop in labor-force participation.

by | Dec 8, 2022 | Stock Market

More than two years after the coronavirus pandemic began, a desire for social distancing is still keeping some people from going back to work. It’s a decision, medical experts say, that everyone must make for themselves, based on their own circumstances. Some economists, however, say that people opting out of work because of the pandemic may also be having an impact on the country’s economic output.

Knowing that COVID-19 has not gone away, some people are not yet prepared to let their guard down, according to a working paper distributed by the National Bureau of Economic Research. Some 13% of U.S. workers said they will continue social distancing as the economy opens up and cases fall, and another 45% said they will do so in limited ways. Only 42% said they plan a “complete return” to the activities they participated in before the pandemic. The study, titled “Long Social Distancing,” estimated that unwillingness among workers to be in close proximity to others — which in many cases is prudent, especially for those who have underlying conditions or elderly relatives — reduced labor participation by 2.5 percentage points in the first half of 2022 compared with what economists would normally expect to see. That translates to $250 billion in potential annual output, representing a drop of nearly 1 percentage point.  The authors of the report define long social distancing as “persistent behavioral responses to the COVID-19 pandemic, whereby (some) individuals avoid face-to-face encounters in public places, including the workplace and public transit.” The paper was written by Steven J. Davis, a professor at the University of Chicago Booth School of Business; Jose Maria Barrero, a professor of finance at Instituto Tecnologico Autonomo de Mex …

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