Munich Personal RePEc Archive

The Recovery of U.S. Cities and States from the COVID-19 Employment Declines of Early 2020

Gabe, Todd (2022): The Recovery of U.S. Cities and States from the COVID-19 Employment Declines of Early 2020.


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This paper examines the economic performance of U.S. cities (i.e., metropolitan areas) and states over the period immediately before and throughout the COVID-19 pandemic. The U.S. economy experienced a 14 percent reduction in year-over-year employment from April 2019 to 2020, and the nation’s employment level in December 2021 was about two percent below its employment two years earlier. The economic performance of U.S. regions varied widely at the beginning of the pandemic (e.g., year-over-year employment growth of U.S. metropolitan areas ranged from a 3 percent to 35 percent decline between April 2019 and 2020) and the months that followed. In general, the regions that experienced the least severe employment impacts associated with COVID-19 had considerably more robust employment in December 2021 compared with pre-pandemic levels two years earlier. Perhaps the most striking feature of the analysis presented in this study is how the past performance of U.S. regions had very little bearing on the relative impacts of COVID-19 on state and metropolitan area employment declines. In other words, the economic impacts of COVID-19 were almost totally unrelated to the economic performance of regions between 2011 and 2018. By the end of 2021, however, the pre-pandemic patterns of a high correlation between past and future employment growth rates began to reemerge.

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