The COVID-19 pandemic led to a decline in economic activity, a fall in demand for labor and a decline in the ability and willingness of people to work in the market. These changes are reflected in high unemployment and reduced labor force participation.
Unemployment peaked in April 2020, with male unemployment rate at 13% and that of women at 16%. There was great variability in unemployment rates by state, ranging from 6% in Wyoming to 30% in Nevada (2021). Labor force participation rates fell by 3 percentage points between February and April 2020, with female labor force participation rate dropping to 55%, and that of men, to 66%.
Unemployment rates went down to 7% by October 2020, and were at 6–7% in March 2021. Similarly, labor force participation rates recovered 2 of the 3 percentage points lost in April 2020 by October 2020, and remained relatively constant after October 2020.
The data for this analysis come from the Current Population Survey (CPS). CPS is a monthly survey run by the Census Bureau with questions about demographic and economic characteristics of the U.S. population. CPS is used to calculate the monthly federal statistics on unemployment. I obtain the data from the Integrated Public Use Microdata Series database (2021).
My sample consists of CPS monthly core employment data for January 2020–March 2021. Each sample includes individual and household weights, which allow inferences about the population from the samples. I discuss CPS weights and examine the weight distribution in the Appendix.
library(sjlabelled) #package to remove data labels. Labels slow down analysis
library(tidyverse)
library(kableExtra)
library(formattable)
d <- d %>%
remove_all_labels() %>% filter(EMPSTAT != 1) %>% #excluding military personnel
select(-CPSID,-CPSIDP) %>% mutate(
month = month.abb[MONTH],
year_month = YEAR * 100 + MONTH,
famid = SERIAL + YEAR * 10000 + MONTH / 10,
#family id is is unique for each family record.
id = SERIAL + YEAR * 10000 + MONTH / 10 + PERNUM / 1000,
#id is unique for each individual record
sex = ifelse(SEX == 1, "men", "women"),
married_spouse_present = (MARST == 1) * 1,
married = (MARST %in% c(1, 2)) * 1,
unemployed = (EMPSTAT %in% c(20, 21, 22)) * 1,
employed = (EMPSTAT %in% c(1, 10, 12)) * 1,
retired = (EMPSTAT == 36) * 1,
lfp = (LABFORCE == 2) * 1,
age16plus = (AGE > 15) * 1,
workingage = (AGE < 63 &
AGE > 17) * 1
) %>% select(-MARST, -EMPSTAT, -LABFORCE, -DIFFANY,-ASECFLAG)
months <- length(unique(d$year_month))
individuals <- nrow(d)
families <- length(unique(d$famid))The 15 monthly surveys contain in total about 1,595,000 observations of individuals, or about 106,000 individuals per month. The observations of individuals are part of about 508,000 observations of households, or about 34,000 households per month.
The Bureau of Labor Statistics defines labor force participation rate as a percentage of civilian noninstitutional population age 16 or older that is in the labor force. Unemployment rate is the percentage of those in the labor force that are unemployed.
The unemployment rate is an imperfect indicator of the effect of a social or economic shock on employment, because the denominator of the rate, the number of people in the labor force, is also affected by the shock. I calculate an alternative measure, employment rate, or the percentage of the adult civilian noninstitutional population that is employed.
The population labor market rates, standard errors and confidence intervals are calculated using the R package srvyr (Freedman Ellis and Schneider 2020). I use the Horvitz-Thompson estimator (Lumley 2010, 5, 221–22)) to compute population-level statistics as weighted sample means and standard errors of the mean.
Labor force participation rate fell from 63% in February 2020 to 60% in April 2020 and recovered to 62% by March 2021. Employment rate lost 10 percentage points between February and April 2020, falling from 61% to 51% of adult population. Employment rate mostly recovered, reaching 58% in March 2021. Unemployment rate was 4% in February 2020, peaked at 15% in April 2020 and came down to 6% by March 2021.
library(ggplot2)
library(plotly)
library(withr)
library(zoo)
library(xts)
library(lubridate)
library(stringr)
library(ggthemes)
library(srvyr)
survey <-
as_survey(d, weights = c(WTFINL)) %>% filter(age16plus == 1) # represent data as a survey with sampling weights and exclude individuals under 16
rates_monthly <-
survey %>% group_by(YEAR, MONTH) %>% summarize(lfp_rate = survey_mean(lfp),
employment_rate = survey_mean(employed))
#standard errors are the standard errors of the sample mean that account for the uncertainty of each observation (weights away from 1 mean that the observations deviation from the mean increases the uncertainty, increasing se).
#The variance attains its maximum value, when all weights except one are zero. Its minimum value is found when all weights are equal (i.e., unweighted mean), in which case it degenerates into the standard error of the mean, squared.https://en.wikipedia.org/wiki/Weighted_arithmetic_mean
unemployment_monthly <-
survey %>% filter(lfp == 1) %>% as_survey(weights = c(WTFINL)) %>% group_by(YEAR, MONTH) %>% summarize(unemployment_rate =
survey_mean(unemployed))
survey_monthly <-
left_join(rates_monthly, unemployment_monthly, by = c("YEAR","MONTH"))
survey_monthly[, -c(1:2)] <-
lapply(survey_monthly[, -c(1:2)], percent, 1)#format all columns except the Year and Month as percentageslibrary(DT)
tab <-
survey_monthly %>% mutate(
YEAR = as.integer(YEAR),
MONTH = MONTH,
month = month.abb[MONTH],
lfp_rate = round(as.numeric(lfp_rate), 3),
lfp_rate_se = round(as.numeric(lfp_rate_se), 3),
employment_rate = round(as.numeric(employment_rate), 3),
employment_rate_se = round(as.numeric(employment_rate_se), 3),
unemployment_rate = round(as.numeric(unemployment_rate), 3),
unemployment_rate_se = round(as.numeric(unemployment_rate_se), 3)
) %>% relocate(month, .after = MONTH)
DT::datatable(
tab,
caption = "Labor Force Participation, Employment and Unemployment Rates in 2020–2021",
colnames = c(
"Year",
"Month Number",
"Month",
"Labor Force Participation Rate",
"Std. Error",
"Employment Rate",
"Std. Error",
"Unemployment Rate",
"Std. Error"
),
rownames = FALSE,
filter = "top",
extensions = 'Buttons',
options = list(dom = 'Blrtip',
buttons = c('copy', 'csv', 'excel'))
) %>% formatPercentage(
c(
"lfp_rate",
"lfp_rate_se",
"employment_rate",
"employment_rate_se" ,
"unemployment_rate",
"unemployment_rate_se"
),
1
)Source: Current Population Survey (2021)
Estimates and standard errors are calculated using estimation methods for survey data with sampling weights (Lumley 2010; Freedman Ellis and Schneider 2020).
In the beginning of 2020 male labor force participation rate was 11 percentage points higher than that of women. This gap did not change throughout 2020–2021, as the labor force participation rates for both sexes dropped 3 percentage points in April 2020 and recovered 2 percentage points by March 2021.
The 2020 recession is unique in recent history in that it led to a greater unemployment shock for women than for men. Past U.S. recessions since the 1970s were characterized by higher peak unemployment rates among men (2021). High unemployment and low labor force participation rates for women combined in April 2020 in a labor market where only 46% of adult women were employed.
Female employment rate was 53% in March 2021, 10 percentage points below male employment rate. The gap is explained partially by the historical gap in labor force participation rates between sexes. In addition, in a pandemic when families have to balance careers with caring for children and elderly, compromises may include exits from the labor market by lower earners and traditional caregivers, typically women.
library(ggplot2)
library(plotly)
library(withr)
library(zoo)
library(xts)
library(lubridate)
library(stringr)
library(ggthemes)
library(srvyr)
rates_monthly <- survey %>% group_by(YEAR, MONTH, sex) %>% summarize(lfp_rate=survey_mean(lfp, vartype = "ci"),
employment_rate=survey_mean(employed, vartype = "ci")) %>%
pivot_wider(names_from=sex, values_from=c(lfp_rate,lfp_rate_low,lfp_rate_upp,employment_rate,employment_rate_low,employment_rate_upp))
unemployment_monthly <- survey %>% filter(lfp==1) %>% group_by(YEAR, MONTH, sex) %>% summarize(unemployment_rate=survey_mean(unemployed, vartype = "ci")) %>%
pivot_wider(names_from=sex, values_from=c(unemployment_rate,unemployment_rate_low,unemployment_rate_upp))
survey_monthly <- left_join(rates_monthly, unemployment_monthly,by=c("YEAR", "MONTH"))
survey_monthly[,-c(1,2)] <- lapply(survey_monthly[,-c(1,2)],percent,0)#format all columns except the Month Number as percentages
survey_monthly$Time <- seq(from=as.Date("2020/1/1"), to=as.Date("2021/3/1"), by="month") %>% as.yearmon() #Need to change the "to" date as new data becomes available
p <-
ggplot(survey_monthly, aes(Time)) + geom_line(aes(
y =lfp_rate_men,
linetype = "Labor force participation rate",
color = "men"
))+ geom_ribbon(aes(ymax=lfp_rate_upp_men,ymin=lfp_rate_low_men), alpha=0.2)+
geom_line(aes(
y =lfp_rate_women,
linetype = "Labor force participation rate",
color = "women"
)) + geom_ribbon(aes(ymax=lfp_rate_upp_women,ymin=lfp_rate_low_women), alpha=0.2)+
#employment rate
geom_line(aes(
y =employment_rate_men,
linetype = "Employment rate",
color = "men"
))+ geom_ribbon(aes(ymax=employment_rate_upp_men,ymin=employment_rate_low_men), alpha=0.2)+
geom_line(aes(
y =employment_rate_women,
linetype = "Employment rate",
color = "women"
)) + geom_ribbon(aes(ymax=employment_rate_upp_women,ymin=employment_rate_low_women), alpha=0.2)+
geom_line(aes(
y =unemployment_rate_men,
linetype = "Unemployment rate",
color = "men"
))+ geom_ribbon(aes(ymax=unemployment_rate_upp_men,ymin=unemployment_rate_low_men), alpha=0.2)+
geom_line(aes(
y =unemployment_rate_women,
linetype = "Unemployment rate",
color = "women"
)) + geom_ribbon(aes(ymax=unemployment_rate_upp_women,ymin=unemployment_rate_low_women), alpha=0.2)+
labs(title = "Labor Market Rates for Men and Women in 2020–2021") +
scale_y_continuous('Rate', labels = scales::percent_format()) +
theme(legend.title = element_blank())
ggplotly(p,
tooltip = c("y", "x","ymax","ymin"),
height = 500,
width = 800)The gray band represents the 95% confidence intervals.
rates_monthly <-
survey %>% group_by(YEAR, MONTH, sex) %>% summarize(lfp_rate = survey_mean(lfp), employment_rate = survey_mean(employed)) %>%
pivot_wider(
names_from = sex,
values_from = c(lfp_rate, lfp_rate_se, employment_rate, employment_rate_se)
)
unemployment_monthly <-
survey %>% filter(lfp == 1) %>% group_by(YEAR, MONTH, sex) %>% summarize(unemployment_rate = survey_mean(unemployed)) %>%
pivot_wider(
names_from = sex,
values_from = c(unemployment_rate, unemployment_rate_se)
)
survey_monthly <-
left_join(rates_monthly, unemployment_monthly, by = c("MONTH","YEAR")) %>% select(
lfp_rate_men,
lfp_rate_se_men,
lfp_rate_women,
lfp_rate_se_women,
employment_rate_men,
employment_rate_se_men,
employment_rate_women,
employment_rate_se_women,
unemployment_rate_men,
unemployment_rate_se_men,
unemployment_rate_women,
unemployment_rate_se_women
)
survey_monthly[, -1] <- lapply(survey_monthly[, -1], percent, 1)tab <-
survey_monthly %>% mutate(
YEAR = as.integer(YEAR),
MONTH = as.integer(MONTH),
month = month.abb[MONTH],
lfp_rate_men = round(as.numeric(lfp_rate_men), 3),
lfp_rate_se_men = round(as.numeric(lfp_rate_se_men), 3),
lfp_rate_women = round(as.numeric(lfp_rate_women), 3),
lfp_rate_se_women = round(as.numeric(lfp_rate_se_women), 3),
employment_rate_men = round(as.numeric(employment_rate_men), 3),
employment_rate_se_men = round(as.numeric(employment_rate_se_men), 3),
employment_rate_women = round(as.numeric(employment_rate_women), 3),
employment_rate_se_women = round(as.numeric(employment_rate_se_women), 3),
unemployment_rate_men = round(as.numeric(unemployment_rate_men), 3),
unemployment_rate_se_men = round(as.numeric(unemployment_rate_se_men), 3),
unemployment_rate_women = round(as.numeric(unemployment_rate_women), 3),
unemployment_rate_se_women = round(as.numeric(unemployment_rate_se_women), 3)
) %>% relocate(month, .after = MONTH)
DT::datatable(
tab,
caption = "Labor Market Statistics by Sex in 2020–2021",
colnames = c(
"Year",
"Month Number",
"Month",
"Lfp Rate Men",
"Std. Error",
"Lfp Rate Women",
"Std. Error",
"Employment Rate Men",
"Std. Error",
"Employment Rate Women",
"Std. Error",
"Unemp Rate Men",
"Std. Error",
"Unemp Rate Women",
"Std. Error"
),
rownames = FALSE,
filter = "top",
extensions = 'Buttons',
options = list(dom = 'Blrtip',
buttons = c('copy', 'csv', 'excel'))
) %>% formatPercentage(
c(
"lfp_rate_men",
"lfp_rate_se_men",
"lfp_rate_women",
"lfp_rate_se_women",
"employment_rate_men",
"employment_rate_se_men" ,
"employment_rate_women",
"employment_rate_se_women" ,
"unemployment_rate_men",
"unemployment_rate_se_men",
"unemployment_rate_women",
"unemployment_rate_se_women"
),
1
)Source: Current Population Survey (2021)
Estimates and standard errors are calculated using estimation methods for survey data with sampling weights (Lumley 2010; Freedman Ellis and Schneider 2020).
In the next part of the analysis of the U.S. labor market during the COVID pandemic I examine the geographic distribution of unemployment and discuss the reasons why some regions have been impacted more and have been slower to recover than others.
All individuals and households surveyed are assigned weights to reflect the fact that some records represent more cases in the population than others. The weights are sampling weights. They are based on the inverse probabilities of selection into the sample, and depend on the known demographic distribution of the population and other factors such as nonresponse. The weights are comparable over time.
In this section I normalize the individual weights so that in the 2020 sample the relatively underrepresented observations have a weight above 1, and overrepresented observations have a weight below 1. Note that standardization is not necessary for calculating the labor market statistics.
d <- d %>% mutate(iweight = WTFINL * n() / sum(WTFINL))The average of the wights for the full sample is 1. The normalized individual weights are calculated as
\(\large \text{normalized weight}=\text{weight} \cdot \frac{\text{number of indivividual observations}}{\sum_i{\text{weight}}}\).
The resulting weights range from 0.04 to 14.19.
The histogram of the weights shows that weights are clustered around a lower peak of 0.16 and around a higher peak of 1.22.
p <-
ggplot(d, aes(x = iweight)) + geom_histogram(
bins = 50,
color = "grey69",
fill = "blue",
alpha = 0.5
) + xlim(0, 4) +
ggtitle("Distribution of the Record Weights") + xlab("Individual Weight") +
scale_y_continuous(
"Number of Records",
labels = function(x)
format(x, big.mark = ",")
)
ggplotly(p, height = 300, width = 600)Source: Current Population Survey (2021)
tab <-
d %>% group_by(YEAR, MONTH) %>% summarize(observations=format(n(), big.mark = ","),weight= round(mean(iweight), 2)) %>%
mutate(YEAR = as.integer(YEAR),
MONTH = as.integer(MONTH), month =month.abb[MONTH]
) %>% relocate(month, .after = MONTH)
DT::datatable(
tab,
caption = "Number of Individual Records and Record Weights",
colnames = c("Year","Month Number","Month", "Number of Individuals", "Average Normalized Weight"),
rownames = FALSE,
filter = "top",
extensions = 'Buttons',
options = list(dom = 'Blrtip',
buttons = c('copy', 'csv', 'excel'))
) Source: Current Population Survey (2021)
In April - June 2020 CPS data was collected exclusively by phone and response rates fell. Starting July 2020 in-person interviews began in some areas, and in September 2020 they expanded to all areas. Sample sizes were lower in March–August 2020, and the responses during these months were weighted higher.
The next part of this analysis: The Geography of Unemployment in 2020–2021
Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, and J. Robert Warrenumley. 2021. “Integrated Public Use Microdata Series, Current Population Survey.” https://cps.ipums.org/cps.
Freedman Ellis, Greg, and Ben Schneider. 2020. Srvyr: ’Dplyr’-Like Syntax for Summary Statistics of Survey Data. https://CRAN.R-project.org/package=srvyr.
Lumley, Thomas S. 2010. Complex Surveys: A Guide to Analysis Using R. Wiley Publishing.
Stolpovsky, Elena. 2021a. “The Geography of Unemployment in the United States During the Covid Pandemic.” https://rpubs.com/elenas70/unemployment_by_state.
———. 2021b. “Unemployment Rates of Men and Women in the United States 1976–2021.” https://rpubs.com/elenas70/historical_unemployment.