A recent paper analyzed the causal effects of delays in updating unemployment insurance systems written in COBOL. States that used COBOL to process UI claims had a 4.4% decline in total card consumption compared to states that didn’t use COBOL. The author’s Fermi estimate is a $181B decline in real GDP due to COBOL.
Read COBOLing Together UI Benefits: How Delays in Fiscal Stabilizers Impact Aggregate Consumption.
- It’s rare to see tech debt quantified so directly (let a lone tech debt that impacts GDP!)
- The Lindy Effect can be extremely expensive