IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Regional Labor Fluctuations: Oil Shocks, Military Spending, and Other Driving Forces

Listed author(s):
  • Steven J. Davis
  • Prakash Lougani
  • Ramamohan Mahidhara

We qualify the contribution of various driving forces to state-level movements in unemployment rates and employment growth from 1956 to 1992. Our story of regional fluctuations in the U.S. economy has a large cast of players -- including government contract awards and the basing of military personnel -- but oil shocks have been the leading actor since 1973. State-level unemployment responses to regional shocks persist for several years. Net migration of people and workers between states is the dominant equilibrating mechanism that brings regional unemployment rates back into alignment. Our preferred estimates for the cost of local job creation, which account for spillover effects across state boundaries, imply that 34-56 thousand 1982 dollars in contract awards buys one (one-half) job-year using the BLS (CPS) employment measure. Spatial dispersion in the regional cycle component of state-level unemployment rates is large, and it varies counter cyclically relative to the national business cycle. Our regression models explain much of this time variation in the period since 1973, primarily through the estimated effects of oil price changes. Adverse regional shocks -- whether involving government contract awards, military basing decisions, or oil price changes -- have proportional greater effects on state-level unemployment rates than favorable shocks. Thus, shocks to the spatial structure of demand do not "average out" in terms of short-run aggregate effects.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 4.

in new window

Date of creation: 01 May 1997
Handle: RePEc:wop:jopovw:4
Note: This paper is not available for download
Contact details of provider: Postal:
Harris Graduate School of Public Policy Studies, 1155 E. 60th Street Chicago, IL 60637

Phone: 773-702-0472
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wop:jopovw:4. 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: (Thomas Krichel)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.