The Impact of State Shutdown Policies on Unemployment During a Pandemic

74 Pages Posted: 21 Apr 2020 Last revised: 9 Nov 2020

See all articles by Edward Kong

Edward Kong

Harvard University, Department of Economics; Harvard Medical School

Daniel Prinz

Harvard University

Date Written: July 14, 2020

Abstract

We use high-frequency Google search data, combined with data on the announcement dates of non-pharmaceutical interventions (NPIs) during the COVID-19 pandemic in U.S. states, to isolate the direct impact of state-level NPIs on own-state unemployment in an event study framework. Exploiting the differential timing of the introduction of restaurant and bar limitations, non-essential business closures, stay-at-home orders, large-gatherings bans, school closures, and emergency declarations, we analyze how Google searches for claiming unemployment insurance varied from day to day and across states. We describe a set of assumptions under which proxy outcomes can be used to estimate a causal parameter of interest when data on the outcome of interest are limited. Using this method, we quantify the share of overall growth in unemployment during the COVID-19 pandemic that was directly due to each of these state-level NPIs. We find that between March 14 and 28, restaurant and bar limitations and non-essential business closures can explain 6.0% and 6.4% of UI claims respectively, while the other NPIs did not directly increase own-state UI claims.

Keywords: COVID-19, coronavirus, Non-pharmaceutical Interventions, NPIs, Unemployment, Google Trends, Economics, Health Policy

JEL Classification: C81, E24, I18, I38, J21, J23

Suggested Citation

Kong, Edward and Prinz, Daniel, The Impact of State Shutdown Policies on Unemployment During a Pandemic (July 14, 2020). Kong, E., & Prinz, D. (2020). Disentangling policy effects using proxy data: Which shutdown policies affected unemployment during the COVID-19 pandemic?. Journal of Public Economics, 189, 104257., Available at SSRN: https://ssrn.com/abstract=3581254 or http://dx.doi.org/10.2139/ssrn.3581254

Edward Kong (Contact Author)

Harvard University, Department of Economics ( email )

Cambridge, MA 02138

Harvard Medical School ( email )

25 Shattuck St
Boston, MA 02115
United States

Daniel Prinz

Harvard University ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
747
Abstract Views
3,485
Rank
73,352
PlumX Metrics