A Shock by Any Other Name? Reconsidering the Impacts of Local Demand Shocks

Sean Bassler, Kevin Rinz, David Wasser and Abigail Wozniak

No 26-03, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Over the last decade, research on labor market adjustment following local demand shocks has expanded to explore a wide variety of measured shocks. However, the worker adjustments observed in response to these shocks are not always consistent across studies. We create a harmonized set of annual commuting-zone-level shocks following the major approaches in the literature to investigate these differences. As one might expect, shocks of different types exhibit different geographic and temporal patterns and are generally weakly correlated with each other. We find they also generate different employment and migration responses, with trade-related shocks showing little response on either margin, while more general Bartik-style shocks are associated with economically meaningful changes in both employment and migration.

Keywords: labor demand shocks; employment; migration (search for similar items in EconPapers)
JEL-codes: J23 R23 (search for similar items in EconPapers)
Pages: 89
Date: 2026-02-05
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwq:102404

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DOI: 10.26509/frbc-wp-202603

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