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Title: Housing Booms, Declining Manufacturing, and Rising Non-Employment Since 2000

Citation Type: Miscellaneous

Publication Year: 2012

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Abstract: We study the extent to which the U.S. housing boom and subsequent housing bust during the 2000s masked (and then unmasked) the sharp, ongoing decline in the manufacturing sector. We exploit cross-city variation in manufacturing declines and housing booms and jointly estimate their e§ects on local employment and wages. Between 2000 and 2007, we Önd that a one standard deviation decrease in manufacturing labor demand reduces the share of non-college men employed by 0:9 percentage points, and a one standard deviation positive housing demand shock increases the employment share by roughly the same magnitude ñenough to fully o§set the adverse e§ects of declining manufacturing. We also Önd that housing booms signiÖcantly increase the likelihood that a displaced manufacturing worker Önds employment, suggesting that at least some of our aggregate ìmaskingî represents non-employment growth that would have occured earlier in the absence of the housing boom. Lastly, applying our estimates to the national labor market, we Önd that non-employment growth was reduced by roughly 30 percent between 2000 and 2007 due to the large, temporary increases in local housing prices, and we Önd that roughly 40 percent of the aggregate change in non-employment between 2000 and 2011 can be attributed to the decline in manufacturing.

Url: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.451.1761&rep=rep1&type=pdf

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Authors: Charles, Kerwin, K; Hurst, Erik; Notowidigdo, Matthew, J

Publisher: University of Chicago and NBER

Data Collections: IPUMS USA

Topics: Housing and Segregation, Labor Force and Occupational Structure

Countries: United States