Regional Labor Market Adjustments in the United States

ByMai Dao, Davide Furceri, Prakash Loungani

November 25, 2014

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Employment, Labor, Labor demand, Labor force, Labor markets, Migration, Population and demographics

Keywords: demand shock, Employment, employment growth, Europe, Interstate migration, Labor demand, labor demand shock, Labor force, labor market, Labor markets, labor mobility, Migration, migration data, migration rate, migration response, migration sensitivity, participation rate, regional labor markets, WP

Pages:
51
Volume:
2014
DOI:
https://doi.org/10.5089/9781498302715.001
Issue:
211
Series:
Working Paper No. 2014/211
Stock No:
WPIEA2014211
ISBN:
9781498302715
ISSN:
1018-5941

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