The Incidence of Local Labor Demand Shocks

By Matthew J. Notowidigdo. Journal of Labor Economics, 2020

209 citations recorded by the source corpus.

Low-skill workers are comparatively immobile. This paper estimates the role of housing prices and social transfers in accounting for this fact using a spatial equilibrium model. Reduced-form estimates using US census data show that positive local labor demand shocks increase population more than negative shocks reduce population, that this asymmetry is larger for low-skill workers, and that such an asymmetry is absent for average wages, housing values, and rental prices. Generalized method of moments estimates reveal that the comparative immobility of low-skill workers is due not to higher mobility costs but to a lower incidence of adverse labor demand shocks.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/a0d57caf5195cc350176005bf6e7443148d3aa66

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Citations in the corpus

Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis (2020, methodology): “0 357 Mexican Inflows (Passel et al. (2012) estimates) 9,327.”
Supply Skepticism: Housing Supply and Affordability (2019, background): “…rates have fallen significantly since the 1980s (Frey, 2009; Kaplan & SchulhoferWohl, 2017; Molloy, Smith, & Wozniak, 2011), even from areas with declining employment opportunities (Autor, Dorn, Hanson, & Song, 2014), and especially for those with the lowest incomes and skills (Notowididgo, 2013).”
The comparative advantage of cities (2020, unknown): “In 9 A number of papers in urban economics posit theoreticalmodelswith no sectoral specialization, in which all locations produce a homogeneous good, yet empirically estimate the model parameters exploiting cross-city variation in industrial structure (Diamond, 2016; Notowidigdo, 2013; Yagan, 2014).”
A Spatial Knowledge Economy (2019, background): “Fourth, people are highly mobile in advanced economies and respond to spatial arbitrage opportunities (Borjas, Bronars, and Trejo, 1992; Dahl, 2002; Notowidigdo, 2011).”
Benign Effects of Automation: New Evidence from Patent Texts (2018, unknown): “This is particularly true for low-skill workers, who are likely to be affected the most by automation (Notowidigdo, 2011).”
Do Credit Market Shocks Affect the Real Economy? Quasi-experimental Evidence from the Great Recession and “Normal” Economic Times (2020, unknown): “19 See also Blanchard and Katz (1992), Card (2001), Autor and Duggan (2003), and Notowidigdo (2011) for other applications of this approach.”
The Persistence of Local Joblessness (2018, background): “Following the recent urban literature (see e.g. Bound and Holzer, 2000; Glaeser et al., 2006; Notowidigdo, 2011; Autor et al., 2013; Beaudry et al., 2014b; Acemoglu et al., 2014) which studies the population response to long-run (usually decadal) shocks, we control for (suitably instrumented)…”
Mismatch Unemployment and the Geography of Job Search (2018, unknown): “…2001, 2005; Borjas, 2003; Ottaviano and Peri, 2006), the impact of local shocks on labor demand (Blanchard and Katz, 1992; Bound and Holzer, 2000; Notowidigdo, 2011), the impact of trade and FDI on labor market outcomes (Autor et al., 2013a,b), the equilibrium e ects of active labor market…”