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Title: Did the Rust Belt Become Shiny? A Study of Cities and Counties that Lost Steel and Auto Jobs in the 1980s
Citation Type: Journal Article
Publication Year: 2007
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Abstract: HOW DO COUNTIES, CITIES, or regions respond to adverse economic shocks? How quickly does an area recover and through which adjustment mechanisms? These questions touch on many different areas of social science and economics and are relevant to our understanding of economic growth, income gaps across regions (for example, North and South in the United States or Italy), and the plight of individual laid-off workers and their families. In this paper we undertake a study of one of the biggest negative shocks to affect the U.S. economy in the past fifty years, namely, the massive loss of steel- and auto-related jobs in the early 1980s, which we refer to collectively as the Rust Belt shock. In the decade between 1977 and 1987 the United States shed about 500,000 jobs in the auto industry and 350,000 jobs in the steel industry, far outstripping any other job losses in recent U.S. history. These job losses were concentrated in roughly 140 of the 3,000 counties in the United States. Kahn as well as Black, McKinnish, and Sanders discuss the size of the manufacturing shocks and accompanying job losses. For the first section of our paper, we assemble total employment, industry level employment, population, labor force participation, and income data at the level of the county and the metropolitan statistical area (MSA). Our basic approach is to regress short- and long-run changes in outcomes on the size of...
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Authors: Stern, Ariel Dora; Sacerdote, Bruce; Feyrer, James
Periodical (Full): Brookings-Wharton Papers on Urban Affairs
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Pages: 41-89
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other
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