Abstract
The global economic downturn caused by the Covid-19 pandemic in 2020 resulted in an increase in unemployment rates and widespread job losses. To address this issue, many countries implemented expansionary monetary and fiscal policies to stimulate their economies and support the labor market. As a result, unemployment rates began to decline in the third quarter of 2020. However, by the fourth quarter of 2021, some countries had achieved pre-pandemic levels of unemployment, while others had not. Therefore, it is essential to understand the factors that influence a country's labor market recovery during the pandemic. This study addresses a crucial but often overlooked determinant: household indebtedness. The research explores the relationship between household indebtedness and labor market recovery during the Covid-19 pandemic. The results show that countries with a higher household debt to GDP ratio were more likely to experience a quicker recovery in their labor markets.
Recommended Citation
Yan, Weinan
(2023)
"The Impact of Household Debt on Labor Market Recovery during the Covid-19 Pandemic,"
Pennsylvania Economic Review: Vol. 30:
No.
1, Article 2.
DOI: https://doi.org/10.65193/3067-8080.1025