We’ve heard a lot about the importance of protecting our youth from Covid infection. This has greatly influenced the time frame for re-opening schools. The Biden administration even today won’t commit to fully reopening schools by September. Naturally, we all agree that we should do everything possible to protect everyone, especially our youth from a potentially fatal infection. But few people are talking about the actual cost of that protection, for the young and the elderly.
Charles L. Hooper and David R. Henderson have analyzed this cost in a meaningful way. Hooper is president of Objective Insights, a firm consulting with pharmaceutical clients. Henderson is an economist, research fellow with the Hoover Institution, and was senior health economist with Reagan’s Council of Economic Advisers.
They say the benefits of protection include reducing the potential for death, pain, suffering and healthcare costs, along with reducing the chances of infecting others. But the main benefit of protection is that fewer people die from Covid-19.
First, we must define some terms. The infection fatality rate is the probability that a person will die once infected, whether that person has symptoms or is unaware of the infection. The global average infection fatality rate of SARS-CoV2 (Covid-19) is roughly 0.23%. That means 23 in 10,000 people die if infected. The average U.S. fatality rate is higher, probably 0.3% because Americans are older and less healthy than those in most other countries.
More important, the infection fatality rate increases exponentially with age. We have known for some time now that the elderly are more vulnerable. Now we know how much. For an 85-year-old it may be 2,000 times as high as for an 18-year-old. This increase in morbidity is due to multiple factors including declining immune systems and co-morbidities, especially heart disease, diabetes, pulmonary disease, and obesity.
The primary risk of infection is death. To calculate the risk, economists use the number of years lost based on statistical life expectancy. A person’s expected years lost is equal to the infection fatality rate times life expectancy times probability of infection.
Expected years lost = infection fatality rate x life expectancy x probability of infection
Perfect protection is unachievable. Based on data from the University of California, Berkeley, they assume that actual protection reduced the risk of infection by roughly half. Herd immunity is the point in the life cycle of an infectious disease when enough of the population has immunity that the number of people to whom a newly infected person passes the disease drops below one. Assuming this would be reached when about 70% of the population has been infected (or vaccinated), imperfect protection reduced the risk of infection for the average American from 70% to 35%.
Now they calculate the benefits of protection for each age group. They find the benefits of protection are disproportionately higher for older people than for young people. Compare an 18-year-old v. an 85 -year-old. If the 18-year-old dies, he loses 61.2 years of expected life. But the probability of him dying is only about 0.0004%. Therefore, the expected years of life lost are only 0.0004% times 35% times 61.2 years. This calculates to 0.0009 year, or only 7.5 hours.
Now consider the 85-year-old. If he dies, he will lose 6.4 years of expected life. His probability of dying is much higher, about 8%. So, the expected years of life lost are 8% times 35% times 6.4 years, which equals 0.179 year – or 65 days. The benefits of protection as measured in life expectancy, are 210 times as high for the older person.
What does it cost to protect the youth?
The costs of protection of the youth include reduced schooling and economic activity, increased substance abuse and suicides, more loneliness, reduced contact with loved ones, delayed cancer diagnoses and childhood vaccinations, increased anxiety, lowered wage growth, travel restrictions, reduced entertainment choices, and fewer opportunities for socializing and building friendships. Whew! Quite a list.
The Organization for Economic Cooperation and Development (OECD) estimated in 2020 the loss of lifetime income for individual students would be 6%, assuming schools were closed or reduced for approximately 67% of the school year. This translates to a loss of lifetime earnings of $102,000 per student using a U.S. median lifetime earnings of $1.7 million. The elderly, mostly retired, were largely unaffected.
This brings us to the important question: Would you pay $102,000 to live an extra 7.5 hours?
What 18-year-old values his time at $13,600 per hour?
The costs for the 85-year-old are negligible – and the benefit is 65 days. The 85-year-old has little to lose and much to gain. The cost-benefit ratio for the young is just the opposite.
This information was not available a year ago when decisions were being made for the young and the old. In hindsight, we should have done more to protect the elderly – and less to protect the young. But having learned these lessons, why are we still keeping schools closed and making young people endure wearing masks?