1. ECONOMIC IMPACTS OF A PANDEMIC
Dr. Mike Walden
Reynolds Distinguished Professor & Extension Economist
North Carolina State University

2. SHORT ANSWER Impact will be BIG and HARMFUL,
affecting almost every person in
some way.

3. CBO STUDY (Dec. 2005) Background Big concern now is with avian flu
Deadly to poultry
Over 100 recorded human cases
CBO= Congressional Business Office

4. 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

5. 3. Develop two estimates and apply to today
Severe case U.S. (similar to )
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.
As noted on slide 3, source is the Congressional Business Office.

6. Short Term Impacts Severe Case 30% of workers sick in most sectors
2.5% of them die
Survivors miss 3 weeks of work

7. Severe case continued Applying average worker productivity
rates, loss to economy is:
$600 billion (2005$), or
5% of GDP

8. Mild Case 25% of workers sick in most sectors 0.1% of them die
Survivors miss 4 days of work

9. Mild case continued Applying average worker productivity
rates, loss to economy is:
$180 billion (2005$), or
1.5% of GDP

10. 5. Long Term Impacts Difficult to quantify, but could have
adverse impacts on size of future
labor supply.

11. Centers for Disease Control and Prevention Study, 1999
Considered medical costs and
lost labor value

12. 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

13. 2. Costs Total costs to U.S. economy between $100 billion and $215

14. Conclusions Economic impact of a pandemic on the
U.S. economy will be BIG –
somewhere between a mild and
severe recession

15. Conclusions - continued
Suggests money spent preventing
or containing a pandemic will be
well spent !!!

16. References
Congressional Budget Office, A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues, December 8, 2005
Centers for Disease Control and Prevention, The Economic Impact of Pandemic Influenza in the U.S.: Priorities for Intervention, 1999.