Full Citation

Title: The Incidence of Local Labor Demand Shocks

Citation Type: Journal Article

Publication Year: 2020

ISBN:

ISSN: 0734-306X

DOI: 10.1086/706048

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Abstract: Low-skill workers are comparatively immobile. This paper estimates the role of housing prices and social transfers in accounting for this fact using a spatial equilibrium model. Reduced-form estimates using US census data show that positive local labor demand shocks increase population more than negative shocks reduce population, that this asymmetry is larger for low-skill workers, and that such an asymmetry is absent for average wages, housing values, and rental prices. Generalized method of moments estimates reveal that the comparative immobility of low-skill workers is due not to higher mobility costs but to a lower incidence of adverse labor demand shocks.

Url: https://www.journals.uchicago.edu/doi/10.1086/706048

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Authors: Notowidigdo, Matthew J.

Periodical (Full): Journal of Labor Economics

Issue: 3

Volume: 38

Pages: 687-725

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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