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Employment, Unemployment and Demand Shifts in Local Labor Markets

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Holzer, Harry J

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Abstract

This paper analyzes the effects of demand shifts within and between local labor markets on unemployment and employment outcomes observed in those markets. The demand shifts are calculated from sales growth data at the firm and industry levels. The results show that, in general, employment and wage adjustments by firms are primarily driven by shifts in labor demand. Demand shifts between local areas account for large fractions of the observed variation in unemployment and employment rate levels and changes across areas. Within-area shifts cause much smaller and insignificant amounts of unemployment, and only if they are between-industry. Copyright 1991 by MIT Press.

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Publisher Info
Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 73 (1991)
Issue (Month): 1 (February)
Pages: 25-32
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Handle: RePEc:tpr:restat:v:73:y:1991:i:1:p:25-32

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Davis, Steven J, 1987. "Allocative Disturbances and Specific Capital in Real Business Cycle Theories," American Economic Review, American Economic Association, vol. 77(2), pages 326-32, May. [Downloadable!] (restricted)
  2. Holzer, Harry J & Katz, Lawrence F & Krueger, Alan B, 1991. "Job Queues and Wages," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 739-68, August. [Downloadable!] (restricted)
  3. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-74, August. [Downloadable!] (restricted)
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  4. Nickell, S.J., 1987. "Dynamic models of labour demand," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 9, pages 473-522 Elsevier. [Downloadable!] (restricted)
  5. Joseph G. Altonji & John C. Ham, 1986. "Variation in Employment Growth in Canada: The Role of External, National, Regional and Industrial Factors," NBER Working Papers 1816, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Jonathan S. Leonard, 1988. "In the Wrong Place at the Wrong Time: The Extent of Frictional and Structural Unemployment," NBER Working Papers 1979, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Marston, Stephen T, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 57-79, February. [Downloadable!] (restricted)
  8. Murphy, Kevin J & Hofler, Richard A, 1984. "Determinants of Geographic Unemployment Rates: A Selectively Pooled-Simultaneous Model," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 216-23, May. [Downloadable!] (restricted)
  9. Dunne, T. & Roberts, M.J. & Samuelson L., 1988. "Plant Turnover And Gross Employment Flows In The U.S. Manufacturing Sector," Papers 9-87-7, Pennsylvania State - Department of Economics.
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  10. Robert J. Gordon, 1982. "Inflation, Flexible Exchange Rates, and the Natural Rate of Unemployment," NBER Working Papers 0708, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(1970-3), pages 369-410. [Downloadable!]
  12. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stanley R. Keil & Lee C. Spector, 2005. "The Impact of Wal-Mart on Employment Andwage Differentials in Alabama," Working Papers 200508, Ball State University, Department of Economics, revised Dec 2005. [Downloadable!]
  2. Timothy Bartik, 1993. "Who Benefits from Local Job Growth: Migrants or the Original Residents?," Regional Studies, Taylor and Francis Journals, vol. 27(4), pages 297-311, January. [Downloadable!] (restricted)
  3. Petri Böckerman, 2004. "Does labour market reorganization reduce unemployment?," Applied Economics Letters, Taylor and Francis Journals, vol. 11(12), pages 745-748, October. [Downloadable!] (restricted)
  4. Maria Francesca Cracolici & Miranda Cuffaro & Peter Nijkamp, 2007. "Geographical Distribution of Unemployment: An Analysis of Provincial Differences in Italy," Tinbergen Institute Discussion Papers 07-065/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  5. Andrew Figura, 2003. "The effect of restructuring on unemployment," Finance and Economics Discussion Series 2003-56, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  6. Note: For best results & the figures should be printed on a non-Postscript printer. Hoynes & H., . "The Employment, Earnings, and Income of Less-Skilled Workers over the Business Cycle," Institute for Research on Poverty Discussion Papers 1199-99, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
    Other versions:
  7. Elhorst, J. Paul, 2000. "The Mystery Of Regional Unemployment Differentialsa Survey Of Theoretical And Empirical Explanations," ERSA conference papers ersa00p60, European Regional Science Association. [Downloadable!]
    Other versions:
  8. Hilary Williamson Hoynes, 1996. "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," NBER Working Papers 5643, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. repec:fth:prinin:454 is not listed on IDEAS
  10. James R. Hines Jr. & Hilary W. Hoynes & Alan B. Krueger, 2001. "Another Look at Whether a Rising Tide Lifts All Boats," NBER Working Papers 8412, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Rick Audas & Peter Dolton, 1998. "The effect of local labour market conditions on the decision to migrate among UK graduates," ERSA conference papers ersa98p245, European Regional Science Association. [Downloadable!]
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