The Decline of the U.S. Rust Belt: A Macroeconomic Analysis
AbstractSome regions of the United States fared much worse than others since the end of WWII. In this paper we document that those regions faring worst in terms of wage and employment growth from 1950-2000 tended to be those in which workers earned the largest wage premiums in 1950. We use this evidence to develop a theory of the decline of the ``Rust Belt'' region, which was highly unionized and paid workers substantially more than other workers of similar skill levels. We develop our theory in a two-region, open-economy version of the Neoclassical Growth model, which we parameterize to match key features of regional and aggregate data. We then use the model to ask how much differently the Rust Belt would have fared if its labor market had not been as distorted.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 793.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-09 (All new papers)
- NEP-DGE-2013-06-09 (Dynamic General Equilibrium)
- NEP-HIS-2013-06-09 (Business, Economic & Financial History)
- NEP-MAC-2013-06-09 (Macroeconomics)
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.:
- James A. Schmitz Jr., 2005.
"What Determines Productivity? Lessons from the Dramatic Recovery of the U.S. and Canadian Iron Ore Industries Following Their Early 1980s Crisis,"
Journal of Political Economy,
University of Chicago Press, vol. 113(3), pages 582-625, June.
- James A. Schmitz, Jr., 2005. "What determines productivity? lessons from the dramatic recovery of the U.S. and Canadian iron-ore industries following their early 1980s crisis," Staff Report 286, Federal Reserve Bank of Minneapolis.
- Carrington, William J & Zaman, Asad, 1994. "Interindustry Variation in the Costs of Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 243-75, April.
- Berthold Herrendorf & Arilton Teixeira, .
"Barriers to Entry and Development,"
2167726, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Benjamin Bridgman, 2011. "Competition, Work Rules and Productivity," 2011 Meeting Papers 289, Society for Economic Dynamics.
- Stephen L. Parente & Edward C. Prescott, 1997.
"Monopoly rights: a barrier to riches,"
236, Federal Reserve Bank of Minneapolis.
- Kondo, Illenin O., 2013. "Trade Reforms, Foreign Competition, and Labor Market Adjustments in the U.S," International Finance Discussion Papers 1095, Board of Governors of the Federal Reserve System (U.S.).
- Holger Breinlich & Gianmarco I. P. Ottaviano & Jonathan R. W. Temple, 2013.
"Regional growth and regional decline,"
LSE Research Online Documents on Economics
51575, London School of Economics and Political Science, LSE Library.
- Breinlich, Holger & Ottaviano, Gianmarco & Temple, Jonathan, 2013. "Regional Growth and Regional Decline," CEPR Discussion Papers 9568, C.E.P.R. Discussion Papers.
- Holger Breinlich & Gianmarco I. P. Ottaviano & Jonathan R. W. Temple, 2013. "Regional Growth and Regional Decline," CEP Discussion Papers dp1232, Centre for Economic Performance, LSE.
- Holger Breinlich & Gianmarco I.P. Ottaviano & Jonathan R.W. Temple, 2013. "Regional growth and regional decline," Economics Discussion Papers 729, University of Essex, Department of Economics.
- Emin Dinlersoz & Jeremy Greenwood & Henry Hyatt, 2014.
"Who Do Unions Target? Unionization Over The Life-Cycle Of U.S. Businesses,"
14-09r, Center for Economic Studies, U.S. Census Bureau, revised Jun 2014.
- Jeremy Greenwood & Henry Hyatt & Emin Dinlersoz, 2014. "Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," 2014 Meeting Papers 62, Society for Economic Dynamics.
- Emin Dinlersoz & Jeremy Greenwood & Henry Hyatt, 2014. "Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," NBER Working Papers 20151, National Bureau of Economic Research, Inc.
- Emin Dinlersoz & Henry Hyatt & Jeremy Greenwood, 2014. "Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," Economie d'Avant Garde Research Reports 24, Economie d'Avant Garde.
- Emin Dinlersoz & Jeremy Greenwood, 2012.
"The Rise And Fall Of Unions In The U.S,"
12-12r, Center for Economic Studies, U.S. Census Bureau, revised Jun 2013.
- Emin Dinlersoz & Jeremy Greenwood, 2012. "The Rise and Fall of Unions in the U.S," Economie d'Avant Garde Research Reports 19, Economie d'Avant Garde.
- Emin M. Dinlersoz & Jeremy Greenwood, 2012. "The Rise and Fall of Unions in the U.S," NBER Working Papers 18079, National Bureau of Economic Research, Inc.
- repec:cen:wpaper:14-09 is not listed on IDEAS
- Oleg Itskhoki & Benjamin Moll, 2014. "Optimal Development Policies with Financial Frictions," NBER Working Papers 19994, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.