Employment, Unemployment and Demand Shifts in Local Labor Markets

Harry Holzer

The Review of Economics and Statistics, 1991, vol. 73, issue 1, 25-32

Abstract: This paper analyzes the effects of demand shifts within and between local labor markets on unemployment and employment outcomes observed in those markets. The demand shifts are calculated from sales growth data at the firm and industry levels. The results show that, in general, employment and wage adjustments by firms are primarily driven by shifts in labor demand. Demand shifts between local areas account for large fractions of the observed variation in unemployment and employment rate levels and changes across areas. Within-area shifts cause much smaller and insignificant amounts of unemployment, and only if they are between-industry. Copyright 1991 by MIT Press.

Date: 1991
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Working Paper: Employment, Unemployment and Demand Shifts in Local Labor Markets (1989)
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