The Differences in the Unemployment Effects of the Great Recession and the COVID-19 Pandemic in the United States: Evidence from Counties with Different Income Levels

This paper investigates the impact of both the Great Recession and the COVID-19 pandemic on economic conditions in United States counties with different income levels. My paper will specifically focus on estimating the immediate effects of both recessions on unemployment rates in counties among different income levels, while also controlling for the percentage of nonwhite individuals in a particular county. Prior literature focuses on income inequality in the United States and amounts of wealth lost during these crises but does not incorporate the relationship between different county income brackets and unemployment changes. I find that, relative to the counties at the bottom 25th percentile of state income brackets, counties in the 75th percentile and above had higher unemployment rate increases immediately following the Great Recession, while counties in the 25th to 75th income level had lower rates of unemployment increases following the Great Recession. There was no significant relationship between county income levels and unemployment during the COVID-19 Pandemic