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Regional labor market adjustment in the United States

Author

Listed:
  • Prakash Loungani

    (International Monetary Fund (IMF))

  • Davide Furceri

    (International Monetary Fund & University)

  • Mai Dao

    (International Monetary Fund)

Abstract

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.

Suggested Citation

  • Prakash Loungani & Davide Furceri & Mai Dao, 2015. "Regional labor market adjustment in the United States," 2015 Meeting Papers 733, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:733
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