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Why does unemployment differ persistently across metro areas?

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  • Jordan Rappaport

Abstract

Unemployment rates differ widely and persistently across U.S. metro areas. Metros that have experienced high or low unemployment rates in one year have tended to stay that way 10 years and even 20 years later. ; Such variation and persistence raises questions: Why don?t households move from high long-term unemployment metros to low long-term unemployment metros? Why don?t firms in need of workers move from low long-term unemployment metros to high long-term unemployment metros? ; Although such moves may seem sensible, Rappaport finds that a number of factors?a mismatch of worker skills to firms' hiring needs, different metro characteristics, and high moving costs?dampen worker and firm movement and allow unemployment rates to diverge.

Suggested Citation

  • Jordan Rappaport, 2012. "Why does unemployment differ persistently across metro areas?," Economic Review, Federal Reserve Bank of Kansas City, vol. 97(Q II).
    • Handle: RePEc:fip:fedker:y:2012:i:qii:n:v.97no.2
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    References listed on IDEAS

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    1. Christian Bayer & Falko Juessen, 2012. "On the Dynamics of Interstate Migration: Migration Costs and Self-Selection," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(3), pages 377-401, July.
    2. Rappaport, Jordan, 2008. "Consumption amenities and city population density," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 533-552, November.
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    Cited by:

    1. Ioannides, Yannis M., 2018. "A DMP model of intercity trade," Labour Economics, Elsevier, vol. 50(C), pages 97-111.
    2. Michael Amior & Alan Manning, 2018. "The Persistence of Local Joblessness," American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
    3. Ryan M. Gallagher & Joseph Persky, 2020. "Heterogeneity of birth‐state effects on internal migration," Journal of Regional Science, Wiley Blackwell, vol. 60(3), pages 517-537, June.

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