Download or read book How Long run Effects of Local Demand Shocks on Employment Rates Vary with Local Labor Market Distress written by Timothy J. Bartik and published by . This book was released on 2021 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates that long-run changes in a county’s prime-age employment rate are significantly affected by labor demand shocks to both the county and its overlying commuting zone (CZ). The overall benefits of labor demand shocks are due more to CZ demand shocks than county demand shocks. A lower preexisting county employment rate increases the effects of CZ demand shocks. Simulations suggest that low prior employment rate CZs, versus higher-rate CZs, will have much larger employment rate effects from demand shocks. Targeting jobs at more distressed counties within a CZ has modest effects, much lower than the effects of targeting jobs at more distressed CZs.
Download or read book Long Run Effects on Employment Rates of Local Demand Shocks Across and Within Local Labor Markets written by Timothy Bartik and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates the long-run effects on a county's prime-age employment rate of labor demand shocks to both the county and its overlying commuting zone (CZ). These effects are allowed to vary with local “distress” (baseline employment rate of the county or CZ), and with the size of the demand shock. In more distressed CZs, a county's employment rate is more affected by county or CZ shocks. As a result, targeting or reallocating jobs to more distressed CZs will tend to raise employment rates. If a county is relatively distressed compared to its CZ, targeting job shocks at that county has greater effects on county employment rates. Reallocating CZ jobs or job shocks towards more distressed counties within a CZ results in greater effects on the CZ's average employment rate. In addition, a CZ shock's effects on a county's employment rate tend to be higher if the CZ's baseline demand-driven growth trend is below average. This is particularly true in CZs whose baseline distress was average or low.
Download or read book How Effects of Local Labor Demand Shocks Vary with Local Labor Market Conditions written by Timothy J. Bartik and published by . This book was released on 2014 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates how effects of shocks to local labor demand on local labor market outcomes vary with initial local economic conditions. The data are on U.S. metro areas from 1979 to 2011. The paper finds that demand shocks to local job growth have greater effects in reducing local unemployment rates if the local economy is initially depressed than if the local economy is booming. Demand shocks have greater effects on local wage rates if the local unemployment rate is initially low, but lesser effects if local job growth is initially high. These different effects of local demand shocks imply that social benefits of adding jobs are two to three times greater per job in more depressed local labor markets, compared to more booming local labor markets.
Download or read book Aggregate Effects in Local Labor Markets of Supply and Demand Shocks written by Timothy J. Bartik and published by . This book was released on 1999 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: Based on state-level labour market data from the Outgoing Rotation Group of the Current Population Survey from 1979 to 1997, discusses the wage and displacement effects of supply and demand shocks.
Download or read book Measuring Local Job Distress written by Timothy J. Bartik and published by . This book was released on 2021 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, estimates are presented on short-run effects of demand shocks on a local labor market’s employment to population ratio (employment rate). Based on the estimates, commuting zones (CZs) better define a local labor market than counties, because both employment and employment rate effects exhibit large spillovers across counties within a CZ. In addition, the estimates suggest that demand shock effects vary, by an amount that is both statistically and substantively significant, with a CZ’s prior overall employment rate.
Download or read book Mismatch in Local Labor Markets written by Timothy J. Bartik and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates the effects on local labor market outcomes (employment rates, real wages, real earnings) of local labor demand shocks to different types of occupations. Occupations are divided into three groups, “high, middle, and low,” with occupations differing in wages paid and education credentials required. Effects are considered on both workers with less than a four-year college degree and workers with a bachelor’s degree or higher. The strongest benefits for labor market outcomes come from demand shocks to “mid jobs.” Mid-job demand shocks particularly benefit less-educated workers. High-job demand shocks often hurt labor market outcomes for less-educated workers, in part because such shocks push up local prices. Low-job demand shocks sometimes improve labor market outcomes for less-educated workers, and sometimes damage labor market outcomes for more-educated workers. Estimated labor demand effects also vary in different types of local labor markets. For example, when baseline local labor market conditions are tight (high baseline employment rate), less-educated workers gain more in real earnings from low-demand shocks, and lose more in real earnings from high-demand shocks.
Download or read book Regional Labor Market Adjustments in the United States and Europe written by Mai Dao and published by International Monetary Fund. This book was released on 2014-02-11 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine patterns of regional adjustments to shocks in the US during the past 40 years. Using state-level data, we estimate the dynamic response of regional employment, unemployment, participation rates and net migration to state-relative labor demand shocks. We find that (i) the long-run effect of a state-specific shock on the state employment level has decreased over time, suggesting less overall net migration in response to a regional shock, (ii) the role of the participation rate as absorber of regional shocks has increased, (iii) the response of net migration to regional shocks is stronger, while that of relative unemployment is weaker during aggregate downturns, and (iv) the change in the response intensity of migration is related to the declining trend in regional dispersion of labor market conditions. Finally, using regional data for a set of 21 European countries, we show that while the short-term response of participation rates to labor demand shocks is typically larger in Europe than in the US, the immediate response of net migration in Europe has increased over time.
Download or read book Who Creates New Firms When Local Opportunities Arise written by Shai Bernstein and published by International Monetary Fund. This book was released on 2018-09-28 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: New firm formation is a critical driver of job creation, and an important contributor to the responsiveness of the economy to aggregate shocks. In this paper we examine the characteristics of the individuals who become entrepreneurs when local opportunities arise due to an increase in local demand. We identify local demand shocks by linking fluctuations in global commodity prices to municipality level agricultural endowments in Brazil. We find that the firm creation response is almost entirely driven by young and skilled individuals, as measured by their level of experience, education, and past occupations involving creativity, problem-solving and managerial roles. In contrast, we find no such response within the same municipalities among skilled, yet older individuals, highlighting the importance of lifecycle considerations. These responsive individuals are younger and more skilled than the average entrepreneur in the population. The entrepreneurial response of young individuals is larger in municipalities with better access to finance, and in municipalities with more skilled human capital. These results highlight how the characteristics of the local population can have a significant impact on the entrepreneurial responsiveness of the economy.
Download or read book Regional Labor Market Adjustments in the United States written by Mai Dao and published by International Monetary Fund. This book was released on 2014-11-25 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine patterns of regional adjustments to shocks in the US during the past four decades. We find that the response of interstate migration to relative labor market conditions has decreased, while the role of the unemployment rate as absorber of regional shocks has increased. However, the response of net migration to regional shocks is stronger during aggregate downturns and increased particularly during the Great Recession. We offer a potential explanation for the cyclical pattern of migration response based on the variation in consumption risk sharing.
Download or read book Local Labor Market Shocks and Family Outcomes written by Jessamyn Schaller and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: While the most often-cited impacts of negative shocks to local labor market shocks are those to individuals' earnings and employment status, the repercussions of economic recession extend beyond these direct labor market effects. My dissertation research explores the effects of local labor market shocks and job displacement on families. Together, the three chapters of my dissertation contribute a better understanding of the overall welfare impacts of business cycle fluctuations. Chapter 1 examines the effect of local labor markets on fertility. To identify exogenous variation in male and female labor demand, I create indices that exploit cross-sectional variation in industry composition, changes in gender-composition within industries, and growth in national industry employment. Consistent with economic theory, I find that improvements in men's labor market conditions are associated with increases in fertility while improvements in women's labor market conditions have the opposite effect. I separately find that increases in unemployment rates are associated with small significant decreases in birth rates. In Chapter 2, I study the effect of business cycles on marriage and divorce rates. I find that increased unemployment is associated with small but significant reductions in both marriages and divorces. The results are robust to replacing general unemployment rates with alternative measures of state economic health, hold for both blacks and whites, and are concentrated among working-aged individuals. Timing analysis suggests that the effect of a shock to the unemployment rate on marriage rates is permanent, while the effect on divorce rates is temporary. In Chapter 3, Ann Stevens and I study the relationship between parental job loss and children's academic achievement using data on job loss and grade retention from the Survey of Income and Program Participation. We find that a parental job loss increases the probability of children's grade retention by 0.8 percentage points, or around 15 percent. After conditioning on child fixed effects, there is no evidence of significantly increased grade retention prior to the job loss, suggesting a causal link between the parental employment shock and children's academic difficulties. These effects are concentrated among children whose parents have a high school education or less.
Download or read book Local Labor Market Cycles and Their Consequences written by Lee A. Lillard and published by . This book was released on 1986 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Note presents an analysis of state labor market cycles as represented by the annual average monthly unemployment rate. It discusses the implications both of long-run differences in the level and amplitude of the state cycles and of short-run cyclic variation for the annual incidence and duration of unemployment and for wages and hours of work. The study's findings indicate that the employment environment is not stable. There is enormous variation across areas within the economy at any given time, and the situation in any particular area may change dramatically over time. The degree to which it changes and the environment in which the worker is placed are significantly different in different areas.
Download or read book Redistribution of Local Labor Market Shocks Through Firms Internal Networks written by Xavier Giroud and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Local labor market shocks are difficult to insure against. Using confidential micro data from the U.S. Census Bureau's Longitudinal Business Database, we document that firms redistribute the employment impacts of local demand shocks across regions through their internal networks of establishments. During the Great Recession, the massive decline in house prices caused a sharp drop in consumer demand, leading to large employment losses in the non-tradable sector. Consistent with firms smoothing out the impacts of these shocks across regions, we find large elasticities of non-tradable establishment-level employment with respect to house prices in other counties in which the firm has establishments. At the same time, establishments of firms with larger regional networks exhibit lower employment elasticities with respect to local house prices in the establishment's own county. To account for general equilibrium adjustments, we aggregate non-tradable employment at the county level. Similar to what we found at the establishment level, we find that non-tradable county-level employment responds strongly to local demand shocks in other counties linked through firms' internal networks. These results are not driven by direct demand spillovers from nearby counties, common shocks to house prices, or local demand shocks affecting non-tradable employment in distant counties indirectly via the trade channel. Our results suggest that firms play an important role in the extent to which local labor market risks are shared across regions.
Download or read book Employment Unemployment and Demand Shifts in Local Labor Markets written by Harry J. Holzer and published by . This book was released on 1989 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the effects of demand shifts within and between local labor markets on unemployment and employment levels and changes observed in those markets. Between-market demand shifts are measured by the means of sales growth for firms in each market, while within-market shifts are measured by variances in each. The variances are also decomposed into between-industry and within-industry components. Some firm-level evidence on job applicants, training and wage and employment adjustments in growing and declining firms is presented as well. The results show that demand shifts between markets account for large fractions of the observed variation in unemployment and employment rate levels and changes across markets. Within-area shifts cause much smaller and insignificant amounts of unemployment if they are between-industry, while shifts within areas and industries (accounting for the vast majority of demand shifts across firms) have no clear effects. The results therefore suggest that the unemployment effects of demand shifts depend on adjustment costs, which appear to be greatest for shifts between markets. Nonlinearities in estimated effects and growing dispersion of unemployment rates across areas also suggest that demand shifts may have raised aggregate unemployment in the U.S. in recent years.
Download or read book The Effects of Local Labor Demand on Individual Labor Market Outcomes for Different Demographic Groups and the Poor written by Timothy J.. Bartik and published by . This book was released on 1993 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra and published by International Monetary Fund. This book was released on 2020-05-29 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Download or read book The Effect of Labor Market Shocks Across the Life Cycle written by Kjell G. Salvanes and published by . This book was released on 2022 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: Adverse economic shocks occur frequently and may cause individuals to reevaluate key life decisions in ways that have lasting consequences for themselves and the broader economy. These life decisions are fundamentally tied to specific periods of an individual's career, and economic shocks may therefore have substantially different impacts on individuals -- and the broader economy -- depending on when they occur. We exploit mass layoffs and establishment closures to examine the impact of adverse shocks across the life cycle on labor market outcomes and major life decisions: human capital investment, mobility, family structure, and retirement. Our results reveal substantial heterogeneity on labor market effects and life decisions in response to economic shocks across the life cycle. Individuals at the beginning of their careers invest in human capital and relocate to new local labor markets, individuals in the middle of their careers reduce fertility and adjust family formation decisions, and individuals at the end of their careers permanently exit the workforce and retire. As a consequence of the differential interactions between economic shocks and life decisions, the very long-term career implications of labor shocks vary considerably depending on when the shock occurs. We also document important heterogeneity across genders and education levels, both with respect to the immediate impact as well as the sum total of all these effects in the very long-term. We conclude that effects of adverse labor shocks are both more varied and more extensive than has previously been recognized, and that focusing on average effects among workers across the life cycle misses a great deal.
Download or read book Recessions and Local Labor Market Hysteresis written by Brad J. Hershbein and published by . This book was released on 2020 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the effects of each U.S. recession since 1973 on local labor markets. We find that recession-induced declines in employment are permanent, suggesting that local areas experience permanent declines in labor demand relative to less-affected areas. Population also falls, primarily due to reduced in-migration, but by less than employment. As a result, recessions generate long-lasting hysteresis: persistent decreases in the employment-to-population ratio and earnings per capita. Changes in the composition of workers explain less than half of local hysteresis. We further show that finite sample bias in vector autoregressions leads to artificial convergence, which can explain why some previous work finds no evidence of hysteresis in employment rates.
