Early COVID-19 Policies and Their Enduring Impact on Unemployment: Causal Evidence Through 2024

In this article, we evaluate the lasting impact of the first-wave COVID-19 pandemic policies on unemployment during the post-first-wave period. Specifically, we analyze the causal effects of the Swedish first-wave policies relative to the Norwegian ones on unemployment during the first-wave period (Q2 and Q3 2020, where Q stands for quarter), the post-first-wave period (Q4 2020 and 2021 – 2024), and the complete period (Q2 2020 – Q4 2024). The Swedish first-wave policies led to an increase of unemployment with an estimate of 506 (95% CI: 406, 607) more unemployment per 100, 000 labor force members during the first-wave period in Sweden. However, the Swedish first-wave policies led to a reduction of unemployment with an estimate of 585 (95% CI: 485, 684) less unemployment during the post-first-wave period in Sweden. Furthermore, the Swedish first-wave policies led to a reduction of unemployment with an estimate of 471 (95% CI: 375, 567) less unemployment during the complete period in Sweden. This provides causal evidence supporting the view that mild first-wave public-health policies helped preserve supply chains and strengthen long-term economic resilience.