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Abstract:

Journal article
The persistence of local joblessness
Michael Amior and Alan Manning
July 2018

American Economic Review 108(7), 2018
DOI: 10.1257/aer.20160575
https://www.aeaweb.org/articles?id=10.1257/aer.20160575


JEL Classification: J21;J61;J64;R23


Tags: labor force; employment; geographic labor mobility; immigrant workers; unemployment; job search; regional migration; regional labor markets; population; neighborhood characteristics

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.

DOI: 10.1257/aer.20160575
https://www.aeaweb.org/articles?id=10.1257/aer.20160575