The Geography of Job Creation and Job Destruction

Moritz Kuhn, Iourii Manovskii and Xincheng Qiu

No 85, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: Spatial differences in labor market performance are large and highly persistent. Using data from the United States, Germany, and the United Kingdom, we document striking similarities across these countries in the spatial differences in unemployment, vacancies, and job filling, finding, and separation rates. The novel facts on the geography of vacancies and job filling are instrumental in guiding and disciplining the development of a theory of local labor market performance. We find that a spatial version of a Diamond-Mortensen-Pissarides model with endogenous separations and on-the-job search quantitatively accounts for all the documented empirical regularities. The model also quantitatively rationalizes why differences in job-separation rates have primary importance in inducing differences in unemployment across space while changes in the job-finding rate are the main driver in unemployment fluctuations over the business cycle.

Keywords: Unemployment; Search and matching; Vacancies; Local labor markets (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 J64 R13 (search for similar items in EconPapers)
Date: 2024-02-28
New Economics Papers: this item is included in nep-dge, nep-geo, nep-lab, nep-tid and nep-ure
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Related works:
Working Paper: The Geography of Job Creation and Job Destruction (2021)
Working Paper: The Geography of Job Creation and Job Destruction (2021)
Working Paper: The Geography of Job Creation and Job Destruction (2021)
Working Paper: The Geography of Job Creation and Job Destruction (2021)
Working Paper: The Geography of Job Creation and Job Destruction (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:97900

DOI: 10.21034/iwp.85

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