Technological Changes, Investments, and Unemployment Pre and Post Covid 19 in the United States A State-Level Analysis

Abstract

Breaking the intractable cycle of poverty in a country requires effective resolution of the unemployment problem by the government. One approach to mitigate unemployment is to foster investment in various sectors, and in the era of the industrial revolution, technological innovation should also be considered. The correlation between technology and unemployment has been extensively debated, and this study seeks to examine the connections between technological progress, physical investment, education, inflation, and unemployment in the United States. We utilized panel data from the 51 states from 2015 to 2021 and found that technological advancements resulted in a decline in the unemployment rate, while inflation had an inverse relationship with it, as predicted by the Phillips curve. However, investments in education increased the unemployment rate, indicating that highly educated individuals experienced notable employment difficulties. Our study had two distinct parts: the initial phase analyzed the statistical explanations for the outcomes, while the latter phase introduced initiatives that focused on government intervention to halt the rising unemployment rate.