COVID-19 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 finds that the pandemic increased unemployment by 27-63% from late January 2020 to the end of September 2020, much higher than the official statistics. Females, workers older than 40, and migrants are more affected. 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. Five months after the full reopening, employment has not recovered to the pre-pandemic level. This lingering impact reflects the global nature of the pandemic and the interconnectedness of the world economy.