New macroeconomic insights on the impacts of Long Covid in the UK
Long Covid is now prevalent in the UK population, with the most recent estimates in March 2023 revealing 1.9 million people living with the condition, of which 1.6 million people are working age.
With a growing evidence base revealing the impact of Long Covid on health and livelihoods, and long-term uncertainty over healthcare funding commitments, there are questions about the long-term economic implications for wider UK society.
Cambridge Econometrics’ new report draws on the latest available evidence to examine the future impacts of Long Covid to 2030, using our macroeconomic model E3ME. The report considers trends such as future prevalence, effects on the ability to work and the costs of Long Covid treatment, and is one of the first macroeconomic impact assessments of Long Covid as a long-term condition with wider societal effects.
Our analysis suggests that Long Covid, if it proceeds according to current knowledge and trends, may represent a further source of chronic pressure and a drag on economic growth.
Chris Thoung, Director of Society at Cambridge Econometrics ([email protected])
Key findings:
- – Using our E3ME macroeconomic model to simulate a Long Covid future, the results suggest that Long Covid may have macroeconomic costs of some £1.5bn of GDP each year, with the impacts increasing if future prevalence were to rise.
- – The main driver of this result is the way in which Long Covid reduces people’s ability to work, leading to lower household incomes and lower economic growth overall. Lower employment of around 138,000 by 2030 follows as a consequence.
- – The pattern of these impacts across the economy reflects a mix of sectors in which more people have Long Covid, leading to reductions in and exits from work; and lower economic activity, which tends to affect market services in an economy such as the UK.
- – In the analysis, the assumption is that total government spending remains the same in the Long Covid scenario, such that any expenditure on Long Covid-related healthcare involves a reduction in some other item(s) of public spending, whether in health or more widely.
- – In the current fiscal environment, this represents a trade-off. As seen early in the pandemic, COVID-19 placed acute pressure on a health system already struggling with mounting waiting lists and deteriorating performance.
Get in touch with our expert
FAQs
What are the health system implications of Long Covid?
Management and treatment costs need staff and funding.
Based on UK employment trends, the analysis suggests a need for some 46,300 public healthcare workers to support Long Covid treatment. If government expenditures do not increase to accommodate this, then one possible outcome is that spending and staffing for other public services may have to fall. The UK health system is, however, already under strain. Another possibility is that health expenditures relating to Long Covid lead to further reductions in elective care, in the form of longer waiting lists and reduced service. Either situation would be exacerbated by higher future prevalence and there are policy choices to be made in this regard. The analysis also does not consider the possibility of resorting to private care, which would further raise the monetary cost on people and their families.
What are the sectoral employment impacts?
The trend in economic inactivity of the 1.9 million people with Long Covid in the UK and the cost of treating the condition could lead to around 138,000 fewer jobs by 2030. The health needs of those with Long Covid could also lead to greater demand for healthcare workers, by as many as 46,300 by 2030.
The sectoral employment effects reflect both the pattern of Long Covid infections across sectors and the composition of the UK economy, with almost 80% of job losses in service sectors especially affecting sectors such as IT, legal and accounting, architecture, and real estate, which could see 93,800 fewer jobs by 2030.
The Retail and Hospitality sector could also suffer with a further 13,000 fewer jobs.
How could different Government financing options for Long Covid healthcare costs impact the UK economy?
Funding to support Long Covid is possible, and future treatments could also help.
We considered alternative tax options for government funding of healthcare, rather than reallocating existing government expenditure. Our analysis shows that Long Covid treatment can be funded on top of existing government expenditures, although the choice of tax instrument does itself have macroeconomic impacts. Income taxes tend to have a slightly more negative impact than, for example, higher national insurance contributions on the part of employers.
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About Cambridge Econometrics
For over 30 years, our experts in macroeconomic modelling analysis have been partnering with clients and collaborators on a wide range of economic, societal and environmental issues, using quantitative approaches to data analysis and economic modelling, to provide valuable evidence-based insights. We are committed to supporting our clients and partners in their decision-making, by providing tangible economic intelligence, which is always underpinned by our robust and innovative methodologies.
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About Balvi
Balvi is a direct giving fund set up by Vitalik Buterin, co-founder of Etherium. The fund has provided extensive support towards Covid and Long Covid research across the UK, Europe and the US.
Acknowledgements
Cambridge Econometrics would like to acknowledge the charity Long Covid Support for their comments and discussions during the development of the report. Long Covid Support is a charity registered in England and Wales and aims to improve the futures of people with Long Covid by ensuring equitable access to high quality healthcare, employment rights and welfare services.
Meet the experts
Cambridge Econometrics’ economic modelling and social policy experts partnered with Professor Emeritus in Public Health Ruairidh Milne to take a multi-disciplinary and fresh approach to assessing the macroeconomic impacts of Long Covid.
Managing Economist Eva Alexandri, Cambridge Econometrics
Eva Alexandri holds 15 years of experience in economic modelling analysis, specialising in the application of Cambridge Econometrics’ global macroeconomic model E3ME on a range of complex social and environmental policy issues.
Director of Society Chris Thoung, Cambridge Econometrics
Chris Thoung holds over 15 years’ experience in public policy analysis and leads Cambridge Econometrics’ social policy and place team. Chris has led a range of studies on health, welfare and the economy for both national governments and international organisations.
Professor Emeritus in Public Health Ruairidh Milne, University of Southampton
Professor Milne is a retired public health physician with over 30 years of expertise in evidence-based medicine and health technology assessment. He worked for many years for the NIHR and its predecessor programmes and for 20 years worked closely with NICE as a member of various advisory committees.
Professor Milne has had Long COVID since March 2020 and remains unwell with the condition.