Regional Labor Market Adjustments in the United States

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 hasdecreased, 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 downturnsand increased particularly during the Great Recession. We offer a potential explanation for thecyclical pattern of migration response based on the variation in consumption risk sharing.

Keywords: Labor markets, United States, Regional shocks, Labor demand, Unemployment, Labor mobility, Migrations, Regional economics, Interstate migration, regional labor markets, employment growth, labor force, job, worker, workers

JEL Classification: F31, F40, J30