Transitioning Economies of Appalachian Counties during COVID-19

In the past decade, the economy of Appalachian United States has been scarcely discussed in literature, and no studies have been devoted to the local economic development after the outbreak of COVID-19. This paper fills the literature gap and empirically examines how the Appalachian United States’ economy has been transitioning under the influence of the pandemic. Using county-level data from Appalachian Regional Commission between 2019 and 2022, we investigate how Appalachian economy regressed during the pandemic. To be specific, transitioning economies indices were calculated for 420 local counties by comparing their Composite Index Value before and after the outbreak of the pandemic, and we run regressions to estimate the influences of unemployment rate, per capita income, and poverty rate. It is found that during COVID-19, the unemployment rate always cast the biggest impact on Appalachian counties’ Composite Index Value while poverty rate the least. Policy implications on how to enhance local labor market are then provided based on our findings. We suggest that the most effective strategy is for the government to reduce local unemployment rate to improve one’s economic ranking.