Emergency hospital during Influenza epidemic, Camp Funston, Kansas

Lessons from the 1918 Influenza Pandemic
    Excerpts from Thomas A. Garrett (2007), "Economic Effects of the 1918 Influenza Pandemic. Implications for a Modern-day Pandemic." Federal Reserve Bank of St. Louis at PDF

Overview of the 1918 Influenza Pandemic

The Spanish flu, also known as the 1918 flu pandemic, was an unusually deadly influenza pandemic. Lasting from January 1918 to December 1920, it infected 500 million people—about a quarter of the world's population at the time. The death toll is estimated to have been anywhere from 17 million[3] to 50 million, and possibly as high as 100 million, making it one of the deadliest epidemics in human history. (Quote from Wikipedia, "Spanish flu")

The influenza pandemic in the United States occurred in three waves during 1918 and 1919.7 The first wave began in March 1918 and lasted throughout the summer of 1918. The more devastating second and third waves (the second being the worst) occurred in the fall of 1918 and the spring of 1919. According to one researcher:

    “Spanish influenza moved across the United States in the same way as the pioneers had, for it followed their trails which had become railroads…the pandemic started along the axis from Massachusetts to Virginia…leaped the Appalachians…positioned along the inland waterways…it jumped clear across the plains and the Rockies to Los Angeles, San Francisco, and Seattle. Then, with secure bases on both coasts...took its time to seep into every niche and corner of America.” 8

But the pandemic’s impact on communities and regions was not uniform across the country. For example, Pennsylvania, Maryland and Colorado had the highest mortality rates, but these states had very little in common. Arguments have been made that mortality rates were lower in later-hit cities because officials in these cities were able to take precautions to minimize the impending influenza, such as closing schools and churches and limiting commerce. The virulence of the influenza, like a typical influenza, weakens over time, so the influenza that struck on the West Coast was somewhat weaker than when it struck the East Coast. But these reasons cannot completely explain why some cities and regions experienced massive mortality rates while others were barely hit with the influenza. Much research has been conducted over the past decades to provide insights into why the pandemic had such different effects on different regions of the country.9 The global magnitude and spread of the pandemic was exacerbated by World War I, which itself is estimated to have killed roughly 10 million civilians and 9 million troops.10 Not only did the mass movement of troops from around the world lead to the spread of the disease, tens of thousands of Allied and Central Power troops died as a result of the influenza pandemic rather than combat.11 Although combat deaths in World War I did increase the mortality rates for participating countries, civilian mortality rates from the influenza pandemic of 1918 were typically much higher. For the United States, estimates of combat-related troop mortalities are about one-tenth that of civilian mortalities from the 1918 influenza pandemic.

Mortality rates from a typical influenza tend to be the greatest for the very young and the very old. What made the 1918 influenza unique was that mortality rates were the highest for the segment of the population aged 18 to 40, and more so for males than females of this age group. In general, death was not caused by the influenza virus itself, but by the body’s immunological reaction to the virus. Individuals with the strongest immune systems were more likely to die than individuals with weaker immune systems.12 One source reports that out of 272,500 male influenza deaths in 1918, nearly 49 percent were aged 20 to 39, whereas only 18 percent were under age 5 and 13 percent were over age 50.13 The fact that males aged 18 to 40 were the hardest hit by the influenza had serious economic consequences for the families that had lost their primary breadwinner. As discussed later in the report, the significant loss of prime working-age employees also had economic consequences for businesses.

Despite the severity of the pandemic, it is reasonable to say that the influenza of 1918 has almost been forgotten as a tragic event in American history. This is not good, as learning from past pandemics may be the only way to reasonably prepare for any future pandemics. Several factors may explain why the influenza pandemic of 1918 has not received a notable place in U.S. history.14

First, the pandemic occurred at the same time as World War I. The influenza struck soldiers especially hard, given their living conditions and close contact with highly mobile units. Much of the news from the day focused on wartime events overseas and the current status of America troops. Thus, the pandemic and World War I were almost seen as one event rather than two separate events. Second, diseases of the day like polio, smallpox and syphilis were incurable and a permanent part of society. Influenza, by contrast, swept into communities, killed members of the population, and was gone. Finally, unlike polio and smallpox, no famous people of the era died from the influenza; thus there was no public perception that even the politically powerful and rich and famous were not immune from the virus.

Although the influenza pandemic of 1918 may be an event that has been relegated to the shadows of American history, the event had significant economic effects. The fact that most of these effects were relatively short-lived does not make them less important to study, especially given the nonzero probability of a future influenza pandemic.

While not a primary focus of this report, the influenza pandemic of 1918 resulted in great human suffering in select areas, as increasing body counts overwhelmed city and medical officials (partly exacerbated by personnel absences from the war). In some cities, like Philadelphia, bodies lay along the streets and in morgues for days, similar to medieval Europe during the Black Death. In light of the potential economic turmoil and human suffering, an understanding of state and federal government response to the 1918 pandemic may also provide some light into what, if anything, government at any level can do to prevent or minimize a modern-day pandemic.

IV. Implications for a Modern-day Pandemic.

The potential financial costs and death tolls from a modern-day influenza pandemic in the United States that were presented at the beginning of this report suggest an initial cost of several hundred billion dollars and the deaths of hundreds of thousands to several million people. The information presented in this report and information provided in two prominent publications on the 1918 influenza pandemic are now used to formulate a list of the likely economic effects of a modern-day influenza pandemic and possible ways to mitigate the severity of any future pandemic:

  • Given the positive correlation between population density and influenza mortalities, cities are likely to have greater mortality rates than rural areas. Compared with 1918, however, urban and rural areas are more connected today—this may decrease the difference in mortality rates between cities and rural areas. Similarly, a greater percentage of the U.S. population is now considered urban (about 80 percent) compared with the U.S. population at the time of the pandemic (51 percent in 1920).
  • Nonwhite groups as a whole have a greater chance of death because roughly 90 percent of all nonwhites live in urban areas (compared with about 77 percent of whites). This correlates with lower-income individuals being more likely to die—nonwhite (excluding Asians) households have a lower median income ($30,858 in 2005) compared with white households ($50,784 in 2005).26 Similarly, only 10 percent of whites were below the poverty level in 2005 compared with more than 20 percent for various minority groups (except Asians).27
  • Urban dwellers are likely to have, on average, better physical access to quality health care, though nearly 19 percent of the city population in the United States has no health coverage compared with only 14 percent of the rural population.28 The question remains as to affordability of health care and whether free-service health-care providers, clinics and emergency rooms (the most likely choices for the uninsured) are able to handle victims of the pandemic.
  • Health care is irrelevant unless there are systems in place to ensure that an influenza pandemic will not knock out health-care provision and prevent the rapid disposal of the dead in the cities (as it did in Philadelphia, which was exacerbated by medical leaves during World War I). If medical staff succumbs to the influenza and facilities are overwhelmed, the duration and severity of the pandemic will be increased. In Philadelphia during the 1918 pandemic, “the city morgue had as many as ten times as many bodies as coffins.”29
  • A greater percentage of families with life insurance would mitigate the financial effects from the loss of a family’s primary breadwinner. However, life insurance is a normal good (positively correlated with income); so, low-income families are less likely to be protected with insurance than are higher-income families.30
  • Local quarantines would likely hurt businesses in the short run. Employees would likely be laid off. Families with no contact to the influenza may too experience financial hardships. To prevent spread, quarantines would have to be complete (i.e., no activity allowed outside of the home). Partial quarantines, such as closing schools and churches but not public transportation or restaurants (as done in Philadelphia, St. Louis and Washington, D.C.) would do little to stop the spread of influenza.
  • Some businesses could suffer revenue losses in excess of 50 percent. Others, such as those providing health services and products, may experience an increase in business (unless a full quarantine exists). If the pandemic causes a shortage of employees, there could be a temporary increase in wages for remaining employees in some industries. This is less likely than in 1918, however, given the greater mobility of workers that exists today.
  • Can we rely on local, state and federal governments to help in the case of a modern-day pandemic? Government has shown its inability to handle disasters in the past (e.g., Hurricane Katrina). Local preparedness by health departments and hospitals, volunteer services (e.g., Red Cross) and private businesses, and responsible actions of the population are likely to mitigate the effects of a modern-day influenza pandemic.
V. Final Thoughts

The influenza of 1918 was the most serious epidemic in the history of the United States. Hundreds of thousands of people died and millions were infected with the highly contagious influenza virus. The possibility of a future influenza pandemic has focused research back to the 1918 pandemic as a foundational model for the likely effects of a modern-day influenza outbreak in the United States. Despite the severity of the 1918 influenza, however, there has been relatively little research done on the economic effects of the pandemic. This report has provided a concise, albeit certainly not complete, discussion and analysis of the economic effects of the 1918 influenza pandemic based on available data and research.

The influenza of 1918 was short-lived and “had a permanent influence not on the collectivities but on the atoms of human society – individuals.” 31 Society as a whole recovered from the 1918 influenza quickly, but individuals who were affected by the influenza had their lives changed forever. Given our highly mobile and connected society, any future influenza pandemic is likely to be more severe in its reach, and perhaps in its virulence, than the 1918 influenza despite improvements in health care over the past 90 years. Perhaps lessons learned from the past can help mitigate the severity of any future pandemic.

Of course, mitigating a pandemic will require cooperation and planning by all levels of government and the private sector. Unfortunately, a 2005 report suggests that the United States is not prepared for an influenza pandemic.32 Although federal, state and local governments in the United States have started to focus on preparedness in recent years, it is fair to say that progress has been slow, especially at local levels of government.33 Different levels of governments have been relatively ineffective in coordinating a response to disasters in the past, whereas private charities and volunteer organizations like the American Red Cross often perform admirably and are often the first responders. Assuming that citizens want government to mitigate an influenza outbreak, there should be concern about government’s readiness and ability to protect citizens from a pandemic. Perhaps public education on flu mitigation, a greater reliance on charitable and volunteer organizations, and a dose of personal responsibility may be the best ways to protect Americans in the event of a future influenza pandemic.



8. Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge, pages 63-64.
9. Barry, John M. (2004). The Great Influenza: The Epic Story of the Deadliest Plague in History. Penguin Group, New York and Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge.
10. Source: http://en.wikipedia.org/wiki/ World_War_I_casualties for a list of sources on World War I casualties.
11. Ayres, Leonard. (1919). The War With Germany: A Statistical Summary. Government Printing Office, Washington D.C.
12. Barry, John M. (2004). The Great Influenza: The Epic Story of the Deadliest Plague in History. Penguin Group, New York.
13. The 272,500 deaths are from a sample of about 30 states. See Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge, page 209.
14. Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge, pages 319-322.

27. U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2005, Table 4 (www.census.gov/ prod/2006pubs/p60-231.pdf).
28. U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2005, Table 8 (www.census.gov/ prod/2006pubs/p60-231.pdf).
29. Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge, page 82.
30. Cummins, J. David and Mahul, Olivier. (June 2004). “The Demand for Insurance with an Upper Limit on Coverage.” Journal of Risk and Insurance, 71(2): 253-264.
31. Crosby, Alfred W. (2003). America’s Forgotten Pandemic: The Influenza of 1918. Cambridge University Press, Cambridge, page 323.
32. Infectious Diseases Society of America. “IDSA’s Principles for Actions Needed to Prepare the U.S. to Effectively Respond to Interpandemic/Pandemic Influenza.” March 2005. www.idsociety.org. 33. See www.pandemicflu.gov, a site managed by the U.S. Department of Health and Human Services. The lack of influenza vaccines, low production capacity, inadequate supply networks, slow government response and poor public education are cited as problems.