Creative Destruction & Inter-Regional Job Reallocation during the Great Recession

By 2014, the US had regained all employment lost during Great Recession. While this marked the return to a pre-recession state for aggregate employment, preceding years reshaped the geography of the US economy, reallocating more than 3 million jobs across counties. This paper provides the first description of inter-regional job reallocation during the Great Recession, and tests whether this reallocation was consistent with productivity enhancing creative destruction. I nd that during the recession period of 2007 { 2010, counties with lower levels of productivity lost a larger share of employment than high productivity regions, consistent with the \trimming effect" associated with creative destruction. Yet, during the recovery period from 2010 to{ 2014, high productivity counties did not grow any faster than low-productivity regions. Taken together, these results point to the need for a closer consideration of policies that affect the reallocation of firms and workers across US regions during recessionary periods.