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The Persistence of Local Joblessness

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  • Michael Amior
  • Alan Manning

Abstract

Differences 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.

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  • Michael Amior & Alan Manning, 2018. "The Persistence of Local Joblessness," American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
  • Handle: RePEc:aea:aecrev:v:108:y:2018:i:7:p:1942-70
    Note: DOI: 10.1257/aer.20160575
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    5. Bosquet, Clément & Overman, Henry G, 2016. "Why does birthplace matter so much? Sorting, learning and geography," CEPR Discussion Papers 11085, C.E.P.R. Discussion Papers.
    6. Yagan, Danny, 2016. "The Enduring Employment Impact of Your Great Recession Location," Institute for Research on Labor and Employment, Working Paper Series qt12d0w9bs, Institute of Industrial Relations, UC Berkeley.
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    8. Ciani, Emanuele & David, Francesco & de Blasio, Guido, 2019. "Local responses to labor demand shocks: A Re-assessment of the case of Italy," Regional Science and Urban Economics, Elsevier, vol. 75(C), pages 1-21.
    9. Gregory Howard, 2017. "The Migration Accelerator: Labor Mobility, Housing, and Aggregate Demand," 2017 Meeting Papers 563, Society for Economic Dynamics.
    10. Jaeger, David A & Ruist, Joakim & Stuhler, Jan, 2018. "Shift-Share Instruments and the Impact of Immigration," CEPR Discussion Papers 12701, C.E.P.R. Discussion Papers.
    11. Stephen J. Redding, 2020. "Trade and geography," CEP Discussion Papers dp1718, Centre for Economic Performance, LSE.
    12. Laws, A., 2020. "Localised employment spillovers," Cambridge Working Papers in Economics 2067, Faculty of Economics, University of Cambridge.
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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