IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/14-211.html
   My bibliography  Save this paper

Regional Labor Market Adjustments in the United States

Author

Listed:
  • Mai Dao
  • Davide Furceri
  • Prakash Loungani

Abstract

We examine patterns of regional adjustments to shocks in the US during the past four decades. We find that the response of interstate migration to relative labor market conditions has decreased, while the role of the unemployment rate as absorber of regional shocks has increased. However, the response of net migration to regional shocks is stronger during aggregate downturns and increased particularly during the Great Recession. We offer a potential explanation for the cyclical pattern of migration response based on the variation in consumption risk sharing.

Suggested Citation

  • Mai Dao & Davide Furceri & Prakash Loungani, 2014. "Regional Labor Market Adjustments in the United States," IMF Working Papers 14/211, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:14/211
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=42464
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:nbr:nberch:13342 is not listed on IDEAS
    2. Raven E. Saks & Abigail Wozniak, 2011. "Labor Reallocation over the Business Cycle: New Evidence from Internal Migration," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 697-739.
    3. Greg Kaplan & Sam Schulhofer‐Wohl, 2017. "Understanding The Long‐Run Decline In Interstate Migration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 57-94, February.
    4. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    5. Joshua Hojvat Gallin, 2004. "Net Migration and State Labor Market Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 1-22, January.
    6. Sorensen, Bent E. & Wu, Yi-Tsung & Yosha, Oved & Zhu, Yu, 2007. "Home bias and international risk sharing: Twin puzzles separated at birth," Journal of International Money and Finance, Elsevier, vol. 26(4), pages 587-605, June.
    7. Greg Kaplan & Sam Schulhofer-Wohl, 2012. "Interstate Migration Has Fallen Less Than You Think: Consequences of Hot Deck Imputation in the Current Population Survey," Demography, Springer;Population Association of America (PAA), vol. 49(3), pages 1061-1074, August.
    8. Mathias Hoffmann & Iryna Shcherbakova-Stewen, 2011. "Consumption Risk Sharing over the Business Cycle: The Role of Small Firms' Access to Credit Markets," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1403-1416, November.
    9. Campbell, John Y. & Cocco, Joao F., 2007. "How do house prices affect consumption? Evidence from micro data," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 591-621, April.
    10. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
    11. Alan J. Auerbach & Yuriy Gorodnichenko, 2012. "Measuring the Output Responses to Fiscal Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 1-27, May.
    12. Pesaran, M. Hashem & Timmermann, Allan, 2002. "Market timing and return prediction under model instability," Journal of Empirical Finance, Elsevier, vol. 9(5), pages 495-510, December.
    13. Raven Molloy & Christopher L. Smith & Abigail Wozniak, 2011. "Internal Migration in the United States," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 173-196, Summer.
    14. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, November.
    15. Alessandra Fogli & Enoch Hill & Fabrizio Perri, 2013. "The Geography of the Great Recession," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 9(1), pages 305-331.
    16. Partridge, Mark D. & Rickman, Dan S., 2003. "The waxing and waning of regional economies: the chicken-egg question of jobs versus people," Journal of Urban Economics, Elsevier, vol. 53(1), pages 76-97, January.
    17. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2012. "The Short- and Long-Term Career Effects of Graduating in a Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 1-29, January.
    18. Granger, Clive W. J. & Terasvirta, Timo, 1993. "Modelling Non-Linear Economic Relationships," OUP Catalogue, Oxford University Press, number 9780198773207.
    19. Smets, Frank & Beyer, Robert C. M., 2015. "Labour market adjustments in Europe and the US: How different?," Working Paper Series 1767, European Central Bank.
    20. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paolo Pasimeni, 2014. "An Optimum Currency Crisis," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(2), pages 173-204, December.
    2. Jauer, Julia & Liebig, Thomas & Martin, John P. & Puhani, Patrick A., 2014. "Migration as an adjustment mechanism in the crisis? A comparison of Europe and the United States," Hannover Economic Papers (HEP) dp-537, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Alfonso Arpaia & Aron Kiss & Balazs Palvolgyi & Alessandro Turrini, 2016. "Labour mobility and labour market adjustment in the EU," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
    4. repec:eee:juecon:v:102:y:2017:i:c:p:76-90 is not listed on IDEAS
    5. Peter Ganong & Daniel W. Shoag, 2017. "Why Has Regional Income Convergence in the U.S. Declined?," NBER Working Papers 23609, National Bureau of Economic Research, Inc.
    6. Bakas, Dimitrios & Panagiotidis, Theodore & Pelloni, Gianluigi, 2016. "On the significance of labour reallocation for European unemployment: Evidence from a panel of 15 countries," Journal of Empirical Finance, Elsevier, vol. 39(PB), pages 229-240.
    7. Christina DePasquale and Kevin Stange, 2014. "Labor Supply Effects of Occupational Regulation: Evidence from the Nurse Licensure Compact," Emory Economics 1414, Department of Economics, Emory University (Atlanta).
    8. Détang-Dessendre, Cécile & Partridge, Mark D. & Piguet, Virginie, 2016. "Local labor market flexibility in a perceived low migration country: The case of French labor markets," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 89-103.
    9. Luis E. Arango & Francesca Castellani & Nataly Obando, 2016. "It is mainly about where you work! Labor demand in the Colombian manufacturing sector," Borradores de Economia 933, Banco de la Republica de Colombia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:14/211. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi). General contact details of provider: http://edirc.repec.org/data/imfffus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.