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The Persistence of Local Joblessness

Michael Amior and Alan Manning ()

American Economic Review, 2018, vol. 108, issue 7, 1942-70

Abstract: 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.

JEL-codes: J21 J61 J64 R23 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20160575
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Working Paper: The persistence of local joblessness (2018) Downloads
Working Paper: The Persistence of Local Joblessness (2015) Downloads
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