Cleveland Fed Research Finds Regions that Imposed Strict Pandemic Measures Saw Slower Labor Market Recovery

Dense regions and those that imposed strict measures to contain the spread of COVID-19 have seen the slowest economic recoveries in employment and labor force participation among metropolitan areas in the United States, according to new Cleveland Fed research. The study refrains from attributing causality, while showing that these variables are associated with a weaker labor market recovery.

In “US Labor Market after COVID-19: An Interim Report,” Cleveland Fed researchers Martin DeLuca and Roberto Pinheiro show that the labor market recovery from the COVID-19 recession has been uneven across space and occupations. In addition, the authors see only limited evidence that the upturn in remote working arrangements is making economic activity more evenly spread across locations.

“While there were some changes in the distribution of economic activity across space, these changes are more in line with an uneven recovery than with a change in the productive process resulting from changes in work arrangements,” DeLuca and Pinheiro write.

Read the Economic Commentary: US Labor Market after COVID-19: An Interim Report (clevelandfed.org)

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892