24 items found
PWBM estimates that the COVID-era Employee Retention Credit (ERC) will have cost more than $300 billion when the IRS finishes processing claims later in 2025, nearly four times the initial projected cost. Most of the ERC was paid retroactively, well after pandemic-related economic disruptions had ended, limiting its effectiveness as a worker retention incentive.
The COVID-19 spike in mortality is the pandemic’s most direct demographic consequence, but not the only one. Factoring in changes in fertility, disruptions to immigration, and indirect demographic spillovers, we estimate that the pandemic reduced the U.S. population 0.5 percent over the long term.
The COVID-19 pandemic led to a decline in births in 2020 followed by a rebound in 2021. We present new estimates of “excess” births during the pandemic, which show that on net over the two-year period, births were roughly in line with pre-pandemic trends.
The COVID-19 pandemic caused major disruptions to U.S. immigration. Policymakers imposed travel restrictions, stopped visa processing, and made significant changes at the border. The pandemic and policy response led to more employment-based immigration and increased illegal border crossings instead of reducing them.
Improvements in U.S. life expectancy stalled in the 2010s, years before the COVID-19 pandemic produced a spike in mortality. We present new estimates of historical patterns in mortality by socio-demographic group and projections of U.S. mortality through 2060.
The economic costs of the COVID-19 pandemic were widely expected to fall disproportionally on women. Instead, the employment rate of prime age women recovered faster than men’s and rose to its highest point in U.S. history in 2023. We show that the resilience of women’s employment is driven by two long-term trends that predate the pandemic and continued through it: 1) the growing share of women who are college graduates, and 2) the rising labor force participation of college-educated mothers with young children.
Using recently available data on learning loss from pandemic school closures, PWBM estimates that projected 2051 GDP is 1.4 percent lower than it would have been without the learning loss. Extending the 2021-22 school year for all public schools by one month would cost $78 billion and limit the reduction in 2051 GDP to 1.0 percent—a net present value gain in GDP of more than $1 trillion over the next three decades, equal to a $15.14 return for each $1 invested.
PWBM estimates that the learning loss from school closures reduced GDP by 3.6 percent in 2050. Extending the 2021-22 school year by one month would cost about $75 billion nationally but would limit the reduction in GDP to 3.1 percent. This smaller reduction in GDP produces a net present value gain of $1.2 trillion over the next three decades, equal to about a $16 return for each $1 invested in extending the 2021-22 school year.
PWBM projects that vaccinating all those eligible by reducing vaccine hesitancy would prevent up to 8.3 million cases in 2021, increase employment by 2.6 million in December 2021, and boost Q4 2020 to Q4 2021 GDP growth by 2 percentage points. In fact, failure to reduce vaccine hesitancy could lead to a “perfect storm” if people also become optimistic and increase their social contact rates beyond the baseline rates that we previously projected. Indeed, increasing social contact rates to 85 percent of pre-COVID levels by the end of 2021 would lead to up to 4.6 million additional COVID-19 cases in 2021.
PWBM estimates that schools in the Philadelphia and surrounding suburb districts with more Black students are less likely to reopen with in-person instruction relative to schools with more White students, even after controlling for differences in income by district. By March 2021, Black students in grades K-5 have incurred a 11.9 percent loss in lifetime income from school closures while White students have lost 10.4 percent. Students educated in the city face larger losses than students educated in the surrounding suburbs.
This brief analyzes the epidemiological and economic effects of maintaining, increasing, or decreasing the current pace of daily COVID-19 vaccinations. PWBM projects that doubling the number of vaccine doses administered daily would boost employment by more than 2 million and real GDP by about 1 percent over the summer of 2021, with smaller effects later in the year.
PWBM estimates that three provisions in the Biden COVID relief plan—direct payments, expanding the Child Tax Credit, and expanding the Earned Income Tax Credit—together would cost $595 billion in calendar year 2021, with 99 percent of households in the bottom 80 percent of incomes receiving a benefit.
PWBM estimates that the $1.9 trillion in spending in the full Biden relief plan would increase GDP in 2021 by 0.6 percent. Over time, the additional public debt resulting from the Biden plan would decrease GDP by 0.2 percent in 2022 and 0.3 percent in 2040.
We estimate the average cost of a COVID-19 infection for four Philadelphia-area counties at $8,000 to $13,000, less than half of our national average cost estimate ($27,230). We estimate a trade-off between cost of infections to the community from in-person schooling versus the lost future earnings to students from closing schools. For example, if Montgomery county had implemented full in-person school in the fall, we project the costs of infection would have been at most $429 million. However, closing schools costs students as much as $4.4 billion in present value of future wages.
As of mid-November, there have been 700,000 more business applications in 2020 than at the same point in 2019, especially concentrated in pandemic-affected industries such as online retail. Accounting for this change in industry composition, we project that the 600,000 additional applications in the first three quarters of 2020 will result in 27,000 more employer businesses formed by Q3 2021 and about 120,000 additional jobs.
We estimate that each month of school closures in response to the COVID pandemic cost current students between $12,000 and $15,000 in future earnings due to lower educational quality. We also estimate total value-of-life, medical, and productivity costs per infection at $38,315 for September 2020. Using these costs, we calculate the cost-benefit threshold to keeping schools closed for October at over 0.355 new expected infections in the community per student kept out of school.
We estimate that the effect of physical encounters on coronavirus transmission has fallen over time, suggesting that people have adapted their behavior in accordance with social distancing best practices. Whether reopenings cause additional outbreaks will depend on the continuation of these behavior changes.
We estimate that a large infrastructure bill would increase GDP by no more than $360 billion per year for 2020 and 2021. Short-run GDP expansion from new infrastructure spending is limited by available projects and likely social distancing measures, and so states could not absorb more than $300 billion per year in new federal aid over the next two years.
In an attempt to prevent and reverse layoffs due to coronavirus, the recently-passed CARES Act established a new lending program targeted at businesses with 500 or fewer employees. These businesses account for 99.7 percent of all firms, 47.3 percent of employment, 40.7 percent of annual payroll, and about one-third of the growth in employment and wages. These businesses also account for 60 percent of employment in the leisure and hospitality sector, which has been disproportionately harmed by the pandemic’s effects.
We estimate the lasting macroeconomic effects of the anticipated recession due to coronavirus, as the initial shock leads to lower federal revenue and higher debt. If the economy recovers the year after a deep recession ("V shape"), we project that federal debt will be 3.2 percent higher and GDP will be 0.3 percent lower by 2030. If the recovery occurs over two additional years (“U shape”), federal debt rises by 5.9 percent and GDP falls by 0.6 percent lower by 2030. Barring future fiscal policy to reduce debt, so-called “potential GDP” will, therefore, be permanently lower due to the coronavirus.
We present budgetary and distributional estimates for three potential versions of the lump-sum payment that President Trump announced earlier today. All three options increase the after-tax income of low income households the most. However, higher-income households have more children on average and would receive larger cash payments unless additional adjustments are made.
The economic downturn due to coronavirus has disproportionately harmed workers in the leisure and hospitality businesses, such as restaurants and bars—these workers tend to be less-educated and lower-income.
