The Persistence of Local Joblessness
- (pp. 1942-70)
AbstractDifferences in employment-population ratios across US commuting zones have persisted for many decades. We claim these disparities represent real gaps in economic opportunity for individuals of fixed characteristics. These gaps persist despite a strong migratory response, and we attribute this to high persistence in labor demand shocks. These trends generate a "race" between local employment and population: population always lags behind employment, yielding persistent deviations in employment rates. Methodologically, we argue the employment rate can serve as a sufficient statistic for local well-being; and we model population and employment dynamics using an error correction mechanism, which explicitly allows for disequilibrium.
Citation2018. "The Persistence of Local Joblessness." American Economic Review, 108 (7): 1942-70. DOI: 10.1257/aer.20160575
- J21 Labor Force and Employment, Size, and Structure
- J61 Geographic Labor Mobility; Immigrant Workers
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics