Teleworking, or using the internet to work from home, was rising in popularity prior to the Covid-19 pandemic. However, as shutdown orders and social distancing measures went into effect, the ability to telework may have been the determining factor for an individual’s employment status.
In April and May 2020, 35.2% of commuters switched to teleworking as a response to Covid-19. Although these workers were able to telecommute, unemployment rates still soared by more than 10 percentage points between January and April 2020. An estimated 90% of the initial wave of unemployment (between February and March 2020) was from jobs that could not be done remotely, indicating telework may have had an important role during the pandemic.
The ability to telework is largely related to the type of work an individual performs, since not all jobs can be done remotely. Jobs in finance, professional and business services, and information are much more likely to be telework-friendly than jobs in hospitality, manufacturing, and construction.
The local broadband situation is also an important factor in the teleworking discussion. If employees do not have home internet access, they may not have been able to telework during Covid-19 – even if their job could have been performed from home. As of 2021, only 72% of rural residents had a home broadband connection – significantly lower than the 79% in urban locations.
Our new study explores changing unemployment rates during the pandemic, with an eye on the importance of home broadband connectivity.
Counties fared quite differently during the early phase of the pandemic. For example, Chickasaw County, Mississippi, saw its unemployment rate rise from 5.1% in February 2020 to over 30% by April, while Bolivar County, Mississippi, only rose from 7.5% to 11.1%. Similarly, many counties recovered quickly by December 2020 while others still had high levels of unemployment.
These different outcomes could have been driven by many factors, including local industry composition, racial and age characteristics, gender breakout of the workforce, how many jobs can be done at home – and home broadband access.
So which factors had some correlation to whether counties had higher or lower unemployment rates? We tested the factors below to see. In the table, a “yes” means that the factor had some measurable relationship (either positive or negative) to the unemployment rate, either during the early phase of the pandemic or later.
|Affect changing unemployment rates?||February to April 2020||April to December 2020|
|Telework ability and broadband adoption||Yes||Yes|
|Payroll Protection Program loans||Yes||Yes|
|Pre-pandemic unemployment rate||Yes||Yes|
As expected, many factors were associated with both the increased unemployment rates between February and April 2020 and the recovery that occurred between April and December. Notably, metropolitan counties saw higher spikes in unemployment during the first phase – but also faster recovery in the second. This was most likely due to the virus spreading faster in metro areas initially before moving into more rural areas later in the year.
What the findings highlighted, however, is that even after controlling for all other factors, local broadband adoption mattered.
From February to April, telework ability decreased the rise in unemployment levels, but only for counties with broadband adoption rates above 60%. Counties with low broadband adoption had no impact of telework on unemployment rates during this time. Although some individuals may have telework-friendly jobs, their home broadband situation may have prevented them from continuing to work.
Alternatively, during the recovery from April to December, counties with broadband adoption rates less than 75% were held back. So, while higher broadband adoption had a positive impact on unemployment rates during the initial phase of the pandemic, the longer-term effects were more diminished.
These results show that the ability to telework, with home broadband access as a necessary condition, was critical in a county’s resiliency to Covid-19 unemployment. The positive impact of teleworking serves as momentum for those pushing telework-friendly policies in businesses and local/regional governments. It also serves as evidence that policies focused on broadband adoption, such as the Emergency Broadband Benefit (EBB) and Affordable Connectivity Program (ACP), are important for economic recovery. These programs offer monthly subsidies (up to $75) to help low-income households pay for internet service. Recent data from ACP enrollment indicates that rural areas are significantly less likely to sign up for the discount – only about 20% of eligible households in rural Zip Codes are participating, compared to 30% in urban Zip Codes.
The future of telework is uncertain, but decreasing the number of disconnected households could pay dividends for local economic resiliency during future health outbreaks and a changing workforce landscape.
Mckenzie Carvalho is a graduate student at Mississippi State University. Amy Hagerman is an assistant professor and Extension specialist at Oklahoma State University. Brian Whitacre is professor and Neustadt Chair at Oklahoma State University. Their study was recently published in the Journal of Regional Analysis and Policy and is entitled “Telework and Covid-19 Resiliency in the Southeastern United States.”