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Predictors of Employment Growth and Unemployment in U.S. Central Cities, 1990-2010

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  • Laura Wolf-Powers

    (University of Pennsylvania)

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    Abstract

    This paper considers employment growth and unemployment from 1990-2010 in a cross-section of cities in light of practical tools that city governments have at their disposal to provide relief. In particular, I test educational attainment (both initial levels and growth over time) and public capital investment as influences on job growth and changes in unemployment rates in 83 central cities in the United States. Change in educational attainment over time is suggestive of causing higher job growth and lower unemployment. The implication is that initiatives to attract and retain college-educated professionals and investments in increasing college attainment among incumbent residents have the potential to reduce joblessness and improve social welfare. Despite some evidence that public capital outlays led to employment growth and reduced unemployment in the 1990s, the overall association between capital outlays and labor market health is weak. Intergovernmental spending as part of the American Recovery and Reinvestment Act (ARRA), however, was found to have a positive effect on unemployment rates in 2009 and 2010. A relatively weak correlation between the two dependent variables used in the analysis—employment growth and unemployment rates—underscores the mitigating roles of migration and labor force participation in translating job creation into employment growth for members of the unemployed population.

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    Bibliographic Info

    Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 13-199.

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    Date of creation: Jun 2013
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    Handle: RePEc:upj:weupjo:13-199

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    Keywords: regional labor markets; unemployment; employment policy; human capital; public capital;

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    1. Jed Kolko & David Neumark, 2009. "Do Some Enterprise Zones Create Jobs?," NBER Working Papers 15206, National Bureau of Economic Research, Inc.
    2. Edward L. Glaeser & Jose A. Scheinkman & Andrei Shleifer, 1995. "Economic Growth in a Cross-Section of Cities," NBER Working Papers 5013, National Bureau of Economic Research, Inc.
    3. Moretti, Enrico, 2004. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," Santa Cruz Department of Economics, Working Paper Series qt5cz0h23t, Department of Economics, UC Santa Cruz.
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    13. repec:fth:stanho:e-95-4 is not listed on IDEAS
    14. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15.
    15. Daniel J. Wilson, 2012. "Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 251-82, August.
    16. Alan H. Peters & Peter S. Fisher, 2002. "State Enterprise Zone Programs: Have They Worked?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number sezp, December.
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