Excerpt from the summary:

AT THE END OF 2019, THE U.S. ECONOMY WAS ADDING TO ITS LONGEST expansion in history, and the main economic concerns related to slowing global growth and uncertainty over U.S. trade policy. These concerns were quickly overshadowed as the potential severity of COVID-19 and the steps needed to fight the pandemic became clearer.

By early 2020, the pandemic brought the longest running economic expansion to an abrupt end. The economic losses have been substantial. Kentucky and the nation experienced record losses in output and employment. By April, Kentucky’s employment declined by 325,100 jobs compared to January. These job losses had wide ranging implications such as widening the racial employment gap; reducing families’ ability to pay for housing; increasing reliance on social programs; and reducing child-care options for working parents. As of October, the state had recovered 67% of jobs lost during the first months of the recession, but the recovery remains far from complete. Kentucky’s employment was still down 107,600 jobs, or 5.5%, from January. Although the aggregate impact on Kentucky’s economy mirrors the national impact, several of Kentucky’s industries were hit harder. Unfortunately, there is still a great deal that is not known about how the pandemic has affected the nation and Kentucky.

We do know, however, that much of the burden imposed by the pandemic, including lives and jobs lost, has been unevenly distributed. Our county-level assessment of lives and jobs lost illustrates the combined effect of deaths attributed to COVID-19, as well as the economic hardship associated with jobs that have gone away in the past year. We find that 14.6% of metro counties nationally are in the bottom quartile—the hardest hit by loss—while slightly rural and mostly rural counties are disproportionately represented in the bottom quartile, 24.4% and 36.7%, respectively. In other words, over one-third of mostly rural counties are in the hardest hit group of counties, while less than 15% of metro counties are in the hardest hit quartile.

The COVID-19 pandemic has exacerbated the economic divide between urban and rural America that has been widening for the last three and a half decades. Numerous social, demographic, health, and economic trends paint a picture of widespread community distress across wide swaths of the country. These trends are especially intense in Kentucky, since about 41% of Kentucky’s population live in somewhat or mostly rural counties, compared to about 14% nationally.

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Contributors: Michael T. Childress, Michael W. Clark, and Bethany Paris

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