U.S. Regional Poverty Post-2000: The Lost Decade

The strong U.S. real income gains and reductions in poverty during the 1990s were largely erased in the following decade, which contained two economic recessions and tepid job growth otherwise. Areas most affected by weak U.S. economic performance could be expected to also have experienced the largest increases in poverty, particularly if interregional labor market adjustment is increasingly limited. We examine this issue, finding that not only was regional poverty affected by regional labor demand shocks, the effect was stronger post-2000, particularly in the long run. Consistent with the poverty results are findings of greater post-2000 regional labor demand effects on employment rates and reduced population adjustments to asymmetric labor demand shocks.