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Journal article

The persistence of local joblessness

Differences in employment-population ratios across US commuting zones have persisted for many decades. We claim these disparities represent real gaps in economic opportunity for individuals of fixed characteristics. These gaps persist despite a strong migratory response, and we attribute this to high persistence in labor demand shocks. These trends generate a "race" between local employment and population: Population always lags behind employment, yielding persistent deviations in employment rates. Methodologically, we argue the employment rate can serve as a sufficient statistic for local well-being; and we model population and employment dynamics using an error correction mechanism, which explicitly allows for disequilibrium.

Michael Amior and Alan Manning

1 July 2018

American Economic Review 108(7) , pp.1942-1970, 2018

DOI: 10.1257/aer.20160575

This Journal article is published under the centre's Labour markets programme.

This publication comes under the following theme: Unemployment and job search