Coronavirus Pandemic and Unemployment: Evidence from Mobile Phone Data in China

Based on mobile phone records for 71 million users and location tracking information for one million users over two years, this study examines the labor market impacts of the COVID-19 pandemic in China’s Guangdong province, whose GDP is larger than all but the top 12 countries in the world. Using a standard difference-in-differences framework, our analysis shows dramatic and protracted effects on the labor market: the pandemic increased unemployment by 72% and unemployment benefit claims by 57% in September 2020, nearly five months after the full reopening. The impact is also highly heterogeneous with females, workers older than 40, and migrants being affected more. Cities that rely more on export or have a higher share of GDP in the hospitality industry but a lower share in the finance and healthcare industries experienced a more pronounced increase in unemployment. The lingering impact likely reflect the global nature of the pandemic and the interconnectedness of the world economy.