An SVAR Model of Fluctuations in U.S. Migration Flows and State Labor Market Dynamics
AbstractLarge internal migration flows are typically viewed as evidence of flexible U.S. labor markets adjusting to asymmetrical regional demand shocks. Yet, amenity-induced migration flows suggest that they may not necessarily facilitate adjustment to demand shocks and instead may be destabilizing. This paper employs a structural vector autoregression model with long-run identifying restrictions to account for both labor-demand and labor-supply shocks in examining the role of migration in U.S. regional labor-market fluctuations. The results reveal that less than one-half of innovations in state migration flows are responses to labor-demand shocks. It is not until the third period that migrants fill a majority of demand-induced jobs in a typical state, while it takes about 7 to 8 years for migration flows to fully adjust to labor-demand shocks. The extent of the migration response also has implications for how much state and local economic development policies benefit original residents.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 72 (2006)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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