The Changes in U.S. Labor Market under Covid-19 Pandemic: Based on Time Series Model

Abstract

In February 2020, the COVID-19 pandemic originally broke out in Wuhan, China and spread out with an extraordinarily rapid rate, resulting the outbreak of pandemic in the global scale and resulting in various economic problems in many countries including change in U.S. labor market, specifically the unemployment rate. This paper applies a non-seasonal autoregressive integrated moving average (ARIMA) model to investigate how much the three categories of unemployment rate (overall, adult, youth) was affected by COVID-19 pandemic while the classification of unemployment is the innovation of this paper. The outcomes of ARIMA model reveals that the impact on all three types of unemployment rate reached the peak at April 2020 whereas the youth unemployment rate was affected the most severely by COVID-19 pandemic compared to overall and adult unemployment rate. From secondary research, border closure, the pause of transportation in the international scale and the restriction of marketing caused by COVID-19 pandemic may be the key of the change in labor market since the oversea transaction was greatly undermined so that the income of many firms declined significantly and they needed to carry out job cut to decrease the cost to make staffs living. To reduce this kind of impact, governments, investors and public are required to prepare well to reduce the unemployment when encountering a pandemic so that the basic social well-being can be guaranteed as much as possible in this type of emergency circumstances.