Unmasking the impact: Analyzing the effect of the COVID-19 pandemic on unemployment : A study across the 290 municipalities in Sweden

Abstract: For the past years, there has been an absence of economic crisis on a global level. The unexpected COVID-19 pandemic caused by the SARS-CoV-2 virus led to a significant disruption in economies across the globe, followed by a decrease in economic activity. The decline in economic activity caused market shocks which eventually increased unemployment. This paper aims to analyse unemployment between the years 2018 to 2021 to measure pre- and post-pandemic unemployment rate among Swedish municipalities. The research question is, was the COVID-19 affected significantly related to an increase in unemployment rates across the 290 municipalities in Sweden? Data collection is from several agencies, including the Swedish Public Employment Service (Arbetsförmedlingen), The Public Health Agency of Sweden (Folkhälsomyndigheten), and Statistic Sweden (SCB). The regression model used to analyse the variables are series of fixed effects regression. The aim of this paper is to contribute to the understanding of the pandemic and economic downturn. By examining variables such as COVID-19 affected, immigrants, education, and disposable income in municipalities, this paper was able to conclude that COVID-19 affected are significantly related to unemployment increase in all 290 municipalities.