The (un)importance of geographical mobility in the Great Recession

Siddharth Kothari, Itay Saporta-Eksten*, Edison Yu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Unemployment during and after the Great Recession has been persistently high. One concern is that the housing bust reduced geographical mobility and prevented workers from moving for jobs. We characterize flows out of unemployment that are related to geographical mobility to construct an upper bound on the effect of mobility on unemployment between 2007 and 2012. The effect of geographical mobility is always small: Using pre-recession mobility rates, decreased mobility can account for only an 11 basis points increase in the unemployment rate over the period. Using dynamics of renter geographical mobility in this period to calculate homeowner counterfactual mobility, delivers similar results. Using the highest mobility rate observed in the data, reduced mobility accounts for only a 33 basis points increase in the unemployment rate.

Original languageEnglish
Pages (from-to)553-563
Number of pages11
JournalReview of Economic Dynamics
Volume16
Issue number3
DOIs
StatePublished - Jul 2013
Externally publishedYes

Keywords

  • Geographical mismatch
  • Great Recession
  • Mobility
  • Stock-flow equations
  • Unemployment

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