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COVID-19 and the U.S. Labor Force

Statement of Question
The U. S labor market, form one area of the country’s economy adversely
affected by COVID-19. The impact of the pandemic on the U.S labor force arose from
the various aspects of the disease such as the effects of the containment measures and
the threats to health and people’s lives, that affected the demand and supply of labor in
the U.S market. According to Albanesi and Kim (2021), COVID-19 resulted in an
economic crisis that in turn affected the demand and supply of labor. The impact of the
pandemic on the demand of labor, emerged from its effects on various economic
activities. As Groshen (2020) notes, the COVID-19 virus, was highly contagious, to
prevent its spread various containment measures were instituted. Measures such as
social distancing, and avoiding physical contact, occasioned stay at home orders and
movement restrictions, affecting the conduct of various economic activities in the
country. The reduced level of economic activities in the country, resulted in business
closure and production stoppage, causing a decrease in labor demand. The pandemic
also impacted labor supply in various ways. The effect of COVID-19 on the supply of
labor, emerged from the health threats associated with it, that made some people
particularly the elderly who were more vulnerable unwilling to work (Goda & Soltas,
2022). COVID-19 also resulted in deaths, that in turn affected labor supply. The study
thus makes an outlook into how COVID-19 affected the U.S. labor force based on its
effects on the demand and supply of labor.
Research Design and Strategy
How the pandemic impacted the U.S labor force will be unearthing through a
consideration of various macroeconomic variables that helps to indicate how COVID-19
affected various aspects of the U.S labor force including the demand and supply of
labor. The research will thus be undertaken in a way that helps to yield empirical data
that will be analyzed using various statistical tools to help bring out the adverse effects
of the outbreak had on the country’s labor market. Economic data that will inform the
study will be obtained from FRED. The data will touch on certain macro-economic
variables, that are crucial in bringing out the impact of COVID-19 on U.S. labor force.
The economic factors that will be considered to help bring out the impact of COVID-19
on the demand of labor include unemployment rate and gross domestic product (GDP).
A consideration of the effects of COVID-19 on the U.S economy, particularly the
country’s labor force will also be considered from the supply side of labor. Under it data
relating to labor force participation rate, and working age population be collected and
analyzed to bring out how they were impacted by COVID-19 as from 2016 to 2022. The
empirical data obtained will then be subjected to statistical analysis, to help bring out
how COVID-19 impacted the U.S labor force.
Data Sources
Data relating to the various economic variables that can help bring out how
COVID-19 affected the U.S labor force will be obtained from Federal Reserve Economic
Data (FRED). The data obtained include that relating to gross domestic product (GDP),
unemployment rate, working age population, and labor force participation rate. FRED is
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a credible and reliable economic data source based on the sources of data it contains.
Moreover, data in FRED is available and accessible anytime, thus appropriate for
carrying out the study.
Literature Review
How COVID-19 affected the U.S labor force has been investigated by a number
of studies, with those studies yielding different views on the subject. According to
Albanesi and Kim (2021), COVID-19, greatly impacted the U.S labor force, particularly
the demand for labor. The pandemic resulted in decreased demand for labor,
particularly for high contact and inflexible jobs. Albanesi and Kim (2019) further notes
that COVID-19 resulted in high unemployment rates, and reduced labor force
participation rate. Bartik et al. (2020) equally notes the advance effect of COVID-19 on
U.S labor force. The pandemic almost resulted in the collapse of the labor market, as
most business firms either closed, and those that remained in operation were severely
impacted, to the extent that they could not continue to keep the entire of their labor
force. The situation prompted layoffs, that in turn resulted to high unemployment rate.
The study by Brooks, Mueller and Thiede (2021) equally recognizes the impact of
COVID-19 on the U.S labor force. “The study however considered the impact of COVID-
19 on the U.S labor force from the perspective of rural and urban populations” (Brooks,
Mueller and Thiede, 2021). As per the study findings, the impact of the pandemic on
U.S labor force was different in urban areas than rural areas. The impact of the
pandemic was particularly higher in urban than rural areas. The study hence concurs
with that by Albanesi and Kim (2021) which held that COVID-19 negatively impacted the
U.S labor force, contributing to high levels of unemployment. The impact was however
more pronounced in urban areas as compared to rural areas due to differences in the
nature of work carried by the two populations.
Goda and Soltas (2022) equally notes that, “the impact of COVID-19 on the U.S
labor force, arose from its effects on the supply of labor. As per the study, COVID-19
caused illness and even death of employees”. Cases of death and illness due to the
highly contagious disease had a huge impact on the country’s labor force, since it
reduced the number of people that made up that country’s labor force. Similarly,
Albanesi and Kim (2021), noted that, “COVID-19 had a huge impact on the supply side
of the U.S labor force”, because it resulted in illness and COVID-19 containment
measures, that impacted the labor force participation rate.
Problems with Evidence from the Related Literature
Study of related literature confirms the various effects the pandemic had on U.S.
labor force. They are however in exhaustive since most of them considers one aspect of
the impact of COVID-19. For example, majority of the previous studies considered
indicates that COVID-19 impacted the U.S labor force from the impact it had on the
demand of labor. The literature shows that COVID-19 resulted in the imposition of
containment measures that disrupted economic activities, resulting in loss of jobs and
an increase in levels of unemployment. Other studies explore the impact of COVID-19
from a supply perspective, in which they consider the impact of COVID-19 from their
effects on the supply of labor. The studies have taken cognizance of the fact that
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COVID-19 resulted in illness and deaths, that in turn affected the U.S labor force
through reduced labor supply. The fact that the existing literature do not address the
dual effect of the pandemic on the country’s labor force, renders them insufficient and
prompts further research into the area, that the current study seeks to address.
Why the Study Approach is Better
The approach employed to undertake the study, is better than those used to
undertake previous studies, because it will consider the effect of the pandemic on the
country’s labor force from the demand and supply perspective. The above end will be
realized by adopting a research design, that will allow the acquisition of data that
shades right on how COVID-19 impacts U.S labor force from a demand and supplier of
labor perspective. The study unlike many of the previous studies, will look into the whole
subject through collection and analysis of macro-economic data that helps to show the
impact of COVID-19 on U.S labor force from both the demand and supply of labor force.
The empirical data that will be collected and analyzed to help bring out how COVID-19
impacted the U.S labor force includes changes in the country’s gross domestic product,
unemployment rate and working age population before, during and after the COVID-19.
The data macro-economic data obtained from FRED, which will then be analyzed to
show how the pandemic disrupted the country’s labor force. The macro-economic
variables will help give a true account of the impact of COVID-19 on U.S labor force,
since changes in macro-economic variables such as gross domestic product,
unemployment rate can help bring out how the pandemic disrupted U.S labor force
demand.
The study also provides an account of the effect of the disease on U.S labor
force from a supply of labor perspective. The view as to whether the pandemic impacted
the U.S labor market by reducing labor supply due to illness and death, will be realized
through the collection and analysis of data relating to labor force participation rate and
changes in working age population before during and after the COVID-19 pandemic, to
help bring out how COVID-19 affected U. S labor force from a supply perspective.
Analysis of the data will help indicate as to whether COVID-19 caused an increase or a
decrease in labor force supply in the U.S.
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References
Adamowicz, M. (2022). COVID-19 Pandemic as a Change Factor in the Labor Market in
Poland. Sustainability, 14(15), 9197.
Albanesi, S. & Kim, J. (2021). Effects of the COVID-19 Recession on the US Labor
Market: Occupation, Family and Gender. Journal of Economic Perspectives,
35(3), 3-24.
Bartik, A., Marianne, B., Lin, F., Rothstein, J. & Unrath, M. (2020). Measuring the Labor
Market at the Onset of the COVID-19 Crisis. National Bureau of Economic
Research, Working Paper 27613.
Brodeur, A., Gray, D., Islam, A. & Bhuiyan, S. (2021). A Literature Review of the
Economics of COVID-19. Journal of Economic Surveys, 35(4), 1007-1044.
Brooks, M., Mueller, J. & Thiede, B. (2021). Rural-Urban Differences in the Labor-Force
Impacts of COVID-19 in the United States. Sociological Research for a Dynamic
World, 7, 1-12.
Goda, G. & Soltas, E. (2022). The Impact of COVID-19 Illness on Workers. National
Bureau of Economic Research, Working Paper 30435.
Groshen, E. (2020). COVID-19’s Impact on the U.S Labor Market as of September
2020. Business Economics, 55, 213 – 228.
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