American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
The Evolution of Local Labor Markets after Recessions
American Economic Journal: Applied Economics
vol. 16,
no. 3, July 2024
(pp. 399–435)
Abstract
This paper studies how US local labor markets respond to employment losses that occur during recessions. Following recessions from 1973 through 2009, we find areas that lose more jobs during the recession experience persistent relative declines in employment and population. Most importantly, these local labor markets also experience persistent decreases in the employment-population ratio, earnings per capita, and earnings per worker. Our results imply that limited population responses result in longer-lasting consequences for local labor markets than previously thought and that recessions are followed by persistent reallocation of employment across space.Citation
Hershbein, Brad, and Bryan A. Stuart. 2024. "The Evolution of Local Labor Markets after Recessions." American Economic Journal: Applied Economics, 16 (3): 399–435. DOI: 10.1257/app.20220132Additional Materials
JEL Classification
- E32 Business Fluctuations; Cycles
- J21 Labor Force and Employment, Size, and Structure
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
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