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Job vacancy chains in metropolitan labor markets


  • Felsenstein, Daniel


  • Persky, Joseph


  • Carlson, Virginia



Metropolitan Labor markets are characterized by gross flows, much larger than the traditional net measures of employment change might suggest. Standard impact analyses of employment change tend to either ignore these flows or treat them as a matter of 'job churning'. But in a metropolitan area experiencing involuntary unemployment and underemployment, these flows may offer real opportunities for individuals to improve their employment positions. Such improvement occurs along 'job chains' in which a new vacancy opens a sequence of job changes allowing workers to move closer to their full employment wage. Not all chains are of the same length, nor does every chain produce the same welfare gain. This paper presents a model of job chaims which addresses chain length, welfare gains and distributional effects. The application of the model is illustrated using a hypothetical case of a new manufacturing firm in the Chicago metropolitan area. The job chains approach to estimating multiplier, efficiency and distributional effects associated with the firm, is compared with conventional impact analysis estimates. The conclusions discuss the implications of these estimates for the evaluation of local economic development projects.

Suggested Citation

  • Felsenstein, Daniel & Persky, Joseph & Carlson, Virginia, 2002. "Job vacancy chains in metropolitan labor markets," ERSA conference papers ersa02p088, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa02p088

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    References listed on IDEAS

    1. B T Robson & M G Bradford & I A Deas, 1999. "Beyond the boundaries: vacancy chains and the evaluation of urban development corporations," Environment and Planning A, Pion Ltd, London, vol. 31(4), pages 647-664, April.
    2. Blanchard, Olivier Jean & Diamond, Peter, 1992. "The Flow Approach to Labor Markets," American Economic Review, American Economic Association, vol. 82(2), pages 354-359, May.
    3. George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
    4. Burgess, Simon M., 1994. "Matching models and labour market flows," European Economic Review, Elsevier, vol. 38(3-4), pages 809-816, April.
    5. Charles Holt & Martin David, 1966. "The Concept of Job Vacancies in a Dynamic Theory of the Labor Market," NBER Chapters,in: The Measurement and Interpretation of Job Vacancies, pages 73-110 National Bureau of Economic Research, Inc.
    6. B T Robson & M G Bradford & I A Deas, 1999. "Beyond the Boundaries: Vacancy Chains and the Evaluation of Urban Development Corporations," Environment and Planning A, , vol. 31(4), pages 647-664, April.
    7. Daniel Felsenstein & Joseph Persky, 1999. "When is a Cost Really a Benefit? Local Welfare Effects and Employment Creation in the Evaluation of Economic Development Programs," Economic Development Quarterly, , vol. 13(1), pages 46-54, February.
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    Cited by:

    1. Carlo Gianelle & Giuseppe Tattara, 2014. "Vacancy chains and the business cycle. Stringing together job-to-job transitions in micro data," International Journal of Manpower, Emerald Group Publishing, vol. 35(8), pages 1212-1235, October.

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