Unemployment during the public health crisis is more serious than during the economic crisis, notably during the COVID-19 pandemic. Most of the literature has focused on the impact of the COVID-19 pandemic on unemployment through linear studies. However, a shock normally has a threshold impact. Without ignoring the importance of the non-linear relationship arising from the COVID-19 pandemic, this study aims to analyse the threshold impact of COVID-19 confirmed cases on unemployment in Malaysia.
The researchers adopted the threshold regression model (TREG) developed by Hansen (2000) for this study.
The result proves that at least one threshold impact exists in the model. Additionally, we show that when the number of COVID-19 confirmed cases is less than 1,817, COVID-19 exerts a bigger positive impact on unemployment. Meanwhile, when the number of cases surpasses 1,817, lockdown plays a more important role than confirmed cases in increasing unemployment.
This study contributes to the literature by providing empirical insights into the distinct roles of the threshold impact of the COVID-19 pandemic in terms of confirmed cases on unemployment.
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2025-0284.
