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Lockdowns and the US Unemployment Crisis

Author

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  • Dreger, Christian

    (DIW Berlin)

  • Gros, Daniel

    (LISER (CEPS/INSTEAD))

Abstract

We analyse the short-term impact of social distancing measures on the US labour market, using a panel threshold model with high frequency (weekly) data on unemployment across US states. We find that changes in the restrictiveness of mandated social distancing, as measured by the Oxford Stringency Index, exert a strong immediate impact on initial unemployment. The unemployment rate is not immediate affected but follows within a very short time (two to four weeks). We also document a substantial asymmetry between tightening and easing: the impact of tightening restrictions is twice as large as that of easing them. The state of the endemic, proxied either by cases or fatalities, constitutes a marginal factor.

Suggested Citation

  • Dreger, Christian & Gros, Daniel, 2021. "Lockdowns and the US Unemployment Crisis," IZA Policy Papers 170, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp170
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    Cited by:

    1. Serra, Laura & Silva, José I. & Vall-llosera, Laura, 2022. "The unemployment effects of closing non-essential activities during the COVID-19 lockdown: The Spanish municipalities," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 806-819.
    2. Péter Füleky & István Szapudi, 2022. "Bird’s Eye View of COVID-19, Mobility, and Labor Market Outcomes Across the US," Economics of Disasters and Climate Change, Springer, vol. 6(2), pages 339-353, July.
    3. Gächter, Martin & Huber, Florian & Meier, Martin, 2022. "A shot for the US economy," Finance Research Letters, Elsevier, vol. 47(PA).
    4. Frenkel Michael & Stadtmann Georg & Zimmermann Lilli, 2023. "Labor market effects of COVID-19 shocks," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 59(1), pages 3-12, March.
    5. Gros, Daniel & Ounnas, Alexandre, 2021. "Labour market responses to the Covid-19 crisis in the United States and Europe," CEPS Papers 32985, Centre for European Policy Studies.
    6. Zarifhonarvar, Ali, 2022. "A Survey on the Impact of Covid-19 on the Labor Market," EconStor Preprints 265549, ZBW - Leibniz Information Centre for Economics.
    7. Ali Zarifhonarvar, 2023. "A Survey on the Impact of Covid-19 on the Labor Market," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 9(1), pages 1-10, 03-2023.
    8. Serra, Laura & Silva, José I. & Vall·llosera, Laura, 2022. "The unemployment effects of closing the non-essential activities during the COVID-19 lockdown: The case of 8,108 Spanish municipalities," MPRA Paper 112138, University Library of Munich, Germany.

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    More about this item

    Keywords

    Corona pandemic; lockdown and unemployment; policy response; COVID-19;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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