COVID-19 and Beyond: Economic Outcomes in Republican vs. Democratic States

Rickman, Dan S. and Wang, Hongbo (2023): COVID-19 and Beyond: Economic Outcomes in Republican vs. Democratic States.

Abstract

The policy responses by state and local governments and reactions by individuals to the outbreak of the COVID-19 pandemic were wide-ranging across the US, often falling along the nation’s political divide. We examine whether Republican states performed better economically, both during the year of the COVID-19 recession and the two years following the recession. We find stronger employment and population growth and smaller increases in unemployment during the COVID-19 recession year in Republican states. But we also find lower per capita income and productivity growth in Republican states during the year of the COVID-19 recession. The employment growth and unemployment advantage in Republican states dissipated during the recovery from the COVID-19 recession such that there was not any longer-term advantage. We compare the COVID-19 recession to the Great Recession and the periods preceding each recession. The population growth advantage in Republican states during the COVID-19 recession was evident in all expansionary and recessionary periods beginning in 2003. We conclude that there was not a clear overall economic benefit to the less restrictive COVID-19 policies and lower virus avoidance by individuals in Republican states, particularly in the longer run.

• Item Type: MPRA Paper
• Language: English
• Keywords: COVD-19; regional growth; state government; republican; democrat
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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