Employment Fluctuations in U.S. Regions and Industries: The Roles of National, Region-Specific, and Industry-Specific Shocks
This study quantifies the roles of national, region-specific, and industry-specific shocks in aggregate employment fluctuations in U.S. regions and industries. Variation among the growth rates of major regions and industries is decomposed into unobserved national, region-, and industry-specific components. The results reject the view that any heterogeneity in regional fluctuations is attributable to differences in industry composition. After controlling for industry mix effects, roughly 40 percent of the variance of the cyclical innovation in any region's growth rate is particular to that region. In addition, region-specific shocks appear to propagate across regions over time. Copyright 1998 by University of Chicago Press.
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