Transcript economic impacts of a pandemic

ECONOMIC IMPACTS OF
A PANDEMIC
Dr. Mike Walden
Reynolds Distinguished Professor &
Extension Economist
North Carolina State University
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SHORT ANSWER
Impact will be BIG and HARMFUL,
affecting almost every person in
some way.
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CBO STUDY (Dec. 2005)
1. Background
Big concern now is with avian flu
Deadly to poultry
Over 100 recorded human cases
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2. Study Approach
Examine past pandemics
Estimate 3% to 4% chance of
occurring in any given year
Chance of severe pandemic:
0.3% in any given year
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3. Develop two estimates and
apply to today
Severe case U.S. (similar to 1918-19)
pandemic: affects 90 million
people with 2 million deaths
Mild case: similar to 1957 & 1968
outbreaks: affects 75 million people
with 100,000 deaths
Assume no effective vaccine.
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4. Short Term Impacts
Severe Case
30% of workers sick in most
sectors
2.5% of them die
Survivors miss 3 weeks of work
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Severe case continued
Applying average worker productivity
rates, loss to economy is:
$600 billion (2005$), or
5% of GDP
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Mild Case
25% of workers sick in most sectors
0.1% of them die
Survivors miss 4 days of work
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Mild case continued
Applying average worker productivity
rates, loss to economy is:
$180 billion (2005$), or
1.5% of GDP
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5. Long Term Impacts
Difficult to quantify, but could have
adverse impacts on size of future
labor supply.
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Centers for Disease Control
and Prevention Study, 1999
Considered medical costs and
lost labor value
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1. Medical Impacts
90,000 – 200,000 deaths
300,000 – 700,000 other hospitalizations
18 mil. – 42 mil. outpatient visits
20 mil. – 47 mil. other illnesses
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2. Costs
Total costs to U.S. economy
between $100 billion and $215
billion (2005 $)
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Conclusions
Economic impact of a pandemic on the
U.S. economy will be BIG –
somewhere between a mild and
severe recession
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Conclusions - continued
Suggests money spent preventing
or containing a pandemic will be
well spent !!!
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References
1. Congressional Budget Office, A
Potential Influenza Pandemic: Possible
Macroeconomic Effects and Policy
Issues, December 8, 2005
2. Centers for Disease Control and
Prevention, The Economic Impact of
Pandemic Influenza in the U.S.:
Priorities for Intervention, 1999.
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