The regional economic impact of the 2020 COVID-19 recession in the USA

Purpose - This paper to identify those states that suffered the largest job losses, largest GDP declines and the highest unemployment rates and those states whose employment levels, unemployment rates and GDP declines were smallest during the COVID-19 recession. In addition, this paper endeavors to provide at least preliminary insights into why some states faired so poorly, whereas other states suffered so little during this downturn. Design/methodology/approach - This paper uses descriptive statistics and regression analysis to analyze the differences in state performance during the COVID-19 recession and recovery. Findings - The results from the two estimated regression models suggest that where you lived determined the severity of the recession and living in a blue state negatively impacted the strength of state’s unemployment rate recovery. Research limitations/implications - This paper looks at only a two-year period starting with the COVID-19 recession and ending in December 2021. Practical implications - This paper provides a regional assessment of the COVID-19 recession and recovery on both a state and regional level. Social implications - The paper uses descriptive statistics to characterize the substantial state-level differences in the relative magnitude of economic decline due to the Covid-19 recession. Regression analysis reveals that blue states experienced weaker recovery as compared to red states. Originality/value - The study uses publicly available data to identify states that suffered the largest job losses and highest peak unemployment rates during the Covid-19 recession. The results are among the first to analyze the economic impact of the Covid-19 recession at the state level.