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Utah's Post-COVID Economic and Social Recovery

For several years, the Social Capital Project has focused on the value of social and community ties in the United States. As Americans have struggled with the COVID-19 pandemic and have been isolated from friends, family, and coworkers over the past year, it has become more evident than ever that community and social ties are critical for supporting a healthy and happy life.  

Utah is fortunate to have a history of strong associational ties, which help support it in times of crisis and provide a strong foundation for a post-crisis recovery. As previous Social Capital Project research explains, family ties, volunteering and charitable giving, and connection to community were strong in Utah leading up to the pandemic.

There is good reason to think Utah’s thriving social capital likely contributed to the state’s resilience during and after the COVID-19 pandemic, as well. Although challenges remain, there are policies that can help alleviate remaining issues, both for Utah and for the rest of the country.  

Utah’s Economic Recovery

Fortunately, Utah’s economy has been resilient throughout the pandemic, and post-pandemic, Utah’s economy continues to improve. For example:

  • Utah’s unemployment rate fell 4.9 percentage points to 2.7 percent over the past 12 months (Figure 1). In addition to closing in on its 2.4 percent pre-pandemic unemployment rate, Utah currently has the fourth lowest unemployment rate in the country.   
  • The state employment report reveals Utah added 117,100 payroll jobs during the last 12 months. The largest payroll job gains in Utah over the last 12 months—nearly 33,000 jobs—occurred in the sector hardest hit by the pandemic: leisure and hospitality (Figure 2).
  • Utah’s state GDP grew by 7.1 percent in the 4th quarter of 2020, the second highest GDP growth in the nation, and it eclipsed the national GDP growth rate of 4.3 percent.

Figure 1. Unemployment Rate, Utah and the United States

(Percent, Seasonally Adjusted)

Source: Bureau of Labor Statistics

Figure 2. Change in Utah Payroll Employment Sector over Past 12 Months

Source: Bureau of Labor Statistics

In addition to Utah’s strong economic indicators, Utah’s population grew at the fastest pace (18.4%) of any state and the nation as a whole (7.4%). Utah’s population growth is thanks to an influx of newcomers, not only in years preceding the pandemic, but also during the pandemic.

However, in part because its economy has performed so well, and Utah’s population has grown so fast, demand for housing has grown and home prices have increased rapidly. These rising home prices are both an economic and social issue—families need to be able to purchase affordable homes, not only because lower prices are easier on Utahn’s budgets, but also because affordable housing supports family formation, and families are a critical source of social capital. More affordable housing means families can choose to live closer to high quality schools and amenities they prefer, and parents can live closer to their jobs—reducing commute time to allow them to spend more time with family, friends, and serving in their community. 

One factor driving higher housing costs are short-term price pressures on building materials. While supply chain pressures are expected to ease in future months, policies can still help reduce housing costs. For instance, the Social Capital Project has suggested reforming local zoning restrictions that limit housing supply and limiting federal housing-related itemized deductions to improve housing affordability. These policy ideas would help take the edge off escalating home prices in Utah and elsewhere.

Utah’s Social Recovery

While Utah’s economy has been strong, certain social indicators have taken at least a temporary hit over the past year. Although Utah’s rates of marriage and fertility are higher than most states in the country, they have been declining, along with national marriage and fertility rates.  

Although 2020 state marriage data is not available yet, county marriage license data provides a snapshot of how marriage rates in Utah fared during COVID-19. Salt Lake County, Utah’s largest county, issued a whopping 26 percent fewer marriage licenses in 2020 than in 2019 (Figure 3), and in the first few months of 2021 the number of marriage licenses issued in Salt Lake County were still lower than in 2019.

As wedding season ramps up and COVID-19 concerns and restrictions dissipate, Utah will likely see an increase in the number of marriages, but time will tell whether marriages rebound to their pre-pandemic levels. Because the pandemic limited opportunities for socializing and meeting new people, fewer couples may have formed in 2020 and early 2021, and thus marriage rates may remain low for a while.

Figure 3. Salt Lake County Marriage Licenses Sold by Month, Jan. 2019 - Apr. 2021

Source: Salt Lake County Clerk's Office

Similar to the marriage rate, the fertility rate has also been trending down nationally and in Utah for some time. Roughly 2,000 fewer children were born in Utah in 2020 compared to 2019, for example.[i]

Of course, 2020 birth data does not tell us much about how COVID-19 may have affected birth rates. Forty weeks is the approximate length of pregnancy, and 40 weeks after mid-March (when COVID-19 restrictions began affecting people’s lives in the U.S.) is late December 2020.

January 2021 is the month we would likely start seeing COVID-19 affect births, and January 2021 saw a major decline in births in Utah compared to January 2020, with 9% fewer births (Figure 4). This drop seems to indicate that at least during the first several weeks of the pandemic, the uncertainty and other consequences of the pandemic deterred some Utahns from adding to their families.  

However, in March and May of 2021 the number of births in Utah were higher than in those same months in 2020, perhaps indicating that the downward effect on births was short-lived. As more data becomes available, we will have a more complete picture of how COVID-19 affected Utahn’s fertility.

Figure 4. Percent Change in Year-Over-Year Births in Utah, Jan. 20 - May 2021

Source: Utah Office of Vital Records and Statistics

Finally, although marriage and fertility trended down, there is a bright spot: divorces in Utah were down by 10 percent in FY 2020 compared to the previous fiscal year. In Utah, FY 2020 ended June 30, 2020, or early on in the pandemic, so divorce rates may have changed as the pandemic wore on. However, divorce rates in the U.S. have held stable or declined for several decades, and divorce rates in other states for which there is data available show a general decline in divorces over the first several months of the pandemic. Also, the American Family Survey found that more couples said the likelihood of their marriage ending in divorce had decreased during the pandemic than said the likelihood of them divorcing had increased during the pandemic.

Marriage and childbearing are personal decisions influenced by multiple factors, not least of which are expectations about the future and limitations on social events like weddings. Now that those obstacles to family formation are resolving, policy reform can help remove other policy barriers to family formation. The Social Capital Project research recommends that at the state and federal levels policymakers remove marriage penalties in the tax code and safety net programs that unduly burden current and would-be married couples. At the federal level, Congress can expand the child tax credit by repurposing the dependent care credit. These changes would help Utah’s families, as well as families across the nation.

Volunteering and Charitable Giving

Past Social Capital Project research found that Utah has the highest share of volunteers, with 38 percent of the state’s population involved in volunteering in 2015. Even during the pandemic, Utah was the most charitable state, ranking second in volunteering and service and ninth in charitable giving, according to a WalletHub study. Utah also ranked as the state with the highest percent of donated income, the highest percent of people who volunteered their time, and the highest percent of the population who donated money. Also, the Utah Food Bank distributed triple the amount of food for those in need during the pandemic, largely through K-12 district schools.

In order to ensure Utah volunteering and philanthropy continues to flourish, the tax code should be reformed so individuals are not taxed on the money they donate to charity. Charitable institutions meet the most pressing needs of our communities, and can reach people more personally than government. Two COVID-19 relief packages enabled Americans to deduct up to $300 in charitable giving, and Sen. Mike Lee (R-UT) has introduced the Universal Giving Pandemic Response and Recovery Act in order to expand and extend the universal charitable deduction beyond the pandemic.

Conclusion

The last year and beyond has come with widespread challenges, and Americans will likely be experiencing some of the negative repercussions for years to come. However, it is promising to see examples of resilience as we move forward. States that had a strong foundation pre-pandemic, like Utah, are especially well positioned to recover their social and economic life in the months to come.

Rachel Sheffield
Senior Policy Advisor

Christina King
Senior Economist


[i] The number of births in Utah dropped between 2019 and 2020, from 66.7 births per 1,000 women aged 15-44 down to 63.8 births per 1,000 women aged 15-44. For total number of births, see Joyce A. Martin, Brady E. Hamilton, Michelle J.K. Osterman, and Anne K. Driscoll, “Births: Final Data for 2019,” National Vital Statistics Reports 70(2), Table 6, “Births, by race and Hispanic origin of mother: United States, each state and territory, 2019,” March 23, 2021 https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-02-508.pdf, and Brady E. Hamilton, Joyce A. Martin, and Michelle J.K. Osterman, “Births: Provisional Data for 2020,” National Vital Statistics Rapid Release 12, Table 4, “Total number of births, by state of residence, provisional 2020, and percentages of cesarean delivery and preterm births, by state of residence: United States, each state and territory, final 2019 and provisional 2020,” May 2021 https://www.cdc.gov/nchs/data/vsrr/vsrr012-508.pdf. The 2020 fertility rate for Utah is calculated based on the estimated number of women ages 15-44 in Utah in 2020, using 2019 population numbers and assuming a 2 percent increase from 2019 to 2020. See U.S. Census Bureau, State Population by Characteristics: 2010-2019, Annual Estimate of the Resident Population for Selected Age Groups by Sex: April 1, 2010 to July 1, 2019, Utah https://www.census.gov/data/datasets/time-series/demo/popest/2010s-state-detail.html.  

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