Why does unemployment differ persistently across metro areas?

Jordan Rappaport

Economic Review, 2012, vol. 97, issue Q II

Abstract: Unemployment rates differ widely and persistently across U.S. metro areas. Metros that have experienced high or low unemployment rates in one year have tended to stay that way 10 years and even 20 years later. ; Such variation and persistence raises questions: Why don?t households move from high long-term unemployment metros to low long-term unemployment metros? Why don?t firms in need of workers move from low long-term unemployment metros to high long-term unemployment metros? ; Although such moves may seem sensible, Rappaport finds that a number of factors?a mismatch of worker skills to firms' hiring needs, different metro characteristics, and high moving costs?dampen worker and firm movement and allow unemployment rates to diverge.

Date: 2012
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