Lessons from the 2020 Covid recession for understanding regional resilience

Abstract

The 2020 Covid-19 recession differs from past recessions due to the immediate economic collapse, making it a unique setting in which to assess local economic resilience. Using county-level data, we identify initial effects of the pandemic and accompanying stay-at-home orders on consumer spending, unemployment insurance claims, small businesses, and low-income employment and earnings. We discuss heterogeneity related to pre-pandemic county characteristics and find differences compared to past recessions. Counties with larger leisure services employment shares fared worse, while counties with less-educated, younger workforces fared better. We find an ambiguous role of small businesses in contrast with favorable impacts during prior downturns.