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The Incidence of Local Labor Demand Shocks
Open accessAbstract
Low-skill workers are comparatively immobile: when labor demand slumps in a city, low-skill workers are disproportionately likely to remain to face declining wages and employment.This paper estimates the extent to which (falling) housing prices and (rising) social transfers can account for this fact using a spatial equilibrium model.Nonlinear reduced form estimates of the model using U.S. Census data document that positive labor demand shocks increase population more than negative shocks reduce population, this asymmetry is larger for low-skill workers, and such an asymmetry is absent for wages, housing values, and rental prices.GMM estimates of the full model suggest that the comparative immobility of low-skill workers is not due to higher mobility costs per se, but rather a lower incidence of adverse labor demand shocks.
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Cites
Changes in Relative Wages, 1963-1987: Supply and Demand Factors
Katz, L. F., & Murphy, K. M. (1992) · The Quarterly Journal of Economics · doi:10.2307/2118323 · Cited by 4,793
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Autor, D. H., Dorn, D., Hanson, G. H., & Song, J. (2014) · The Quarterly Journal of Economics · doi:10.1093/qje/qju026 · Cited by 803
The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten's Theorem
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The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce*
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Metadata
- Authors
- Notowidigdo, M.
- Venue
- National Bureau of Economic Research
- Publisher
- National Bureau of Economic Research
- Published
- 2011-06
- OpenAlex
- W3121587222
- Cited by
- 164
- References
- 1
- Type
- report
- Language
- en
- Open access
- green
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