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Geography of Unemployment in the Midwest During the COVID-19 Pandemic: A Spatial Analysis

Author

Listed:
  • Kathleen G Arano

    (Indiana University Southeast)

  • Arun K Srinivasan

    (Indiana University Southeast)

Abstract

Unemployment surged across the U.S. following the onset of the COVID-19 pandemic. We analyze the spatial pattern of county-level unemployment in the Midwest during the second quarter (Q2) of 2020 when it peaked, followed by the fourth quarter (Q4) of 2020 when local economies began to recover. We find clustering, with most counties in the Eastern section of the Midwest showing unemployment in the 75th quantile of the distribution (hardest-hit counties). In contrast, counties in the Western section mostly showed unemployment in the 25th quantile (least-hit counties). Our spatial lag regression analysis of the unemployment change between Q2 and pre-COVID (Q1) finds a higher increase in unemployment in counties with a high COVID-19 Community Vulnerability Index (CCVI). In addition, counties that relied on Leisure & Hospitality, and Manufacturing, and had a mask mandate, showed a larger increase in unemployment in Q2 and persisted through Q4 albeit to a lesser degree.

Suggested Citation

  • Kathleen G Arano & Arun K Srinivasan, 2023. "Geography of Unemployment in the Midwest During the COVID-19 Pandemic: A Spatial Analysis," Journal of Economic Insight, Missouri Valley Economic Association, vol. 49(2), pages 1-36.
    • Handle: RePEc:mve:journl:v:49:y:2023:i:2:p:1-36
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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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