TY - JOUR
T1 - The (un)importance of geographical mobility in the Great Recession
AU - Kothari, Siddharth
AU - Saporta-Eksten, Itay
AU - Yu, Edison
N1 - Funding Information:
✩ We would like to thank Nick Bloom, Liran Einav, Kyna Fong, Robert Hall, Caroline Hoxby, Pete Klenow, Pablo Kurlat, Jonathan Levin, Monika Piazzesi, Luigi Pistaferri, Martin Schneider, Yaniv Yedid-Levi, the editor and two anonymous referees for helpful comments. We would also like to thank Daniel Grodzicki, Iiro Mäkinen, Roy Mill, Frédéric Panier, Krishna Rao, and the seminar participants at Stanford University for useful discussions. Edison Yu is supported by the Hewlett Packard Stanford Graduate Fellowship. Siddharth Kothari is supported by the SIEPR Leonard W. Ely and Shirley R. Ely Graduate Student Fund Fellowship through a grant to Stanford Institute for Economic Policy Research. * Corresponding author. Fax: +1 650 725 5702. E-mail addresses: [email protected] (S. Kothari), [email protected] (I. Saporta-Eksten), [email protected] (E. Yu). 1 The term mobility has a broad interpretation in the labor economics literature, including occupational mobility and inter-generational mobility. This paper is focused on geographical mobility only. Throughout, for brevity, we refer to geographical mobility as mobility.
PY - 2013/7
Y1 - 2013/7
N2 - 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.
AB - 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.
KW - Geographical mismatch
KW - Great Recession
KW - Mobility
KW - Stock-flow equations
KW - Unemployment
UR - http://www.scopus.com/inward/record.url?scp=84878415066&partnerID=8YFLogxK
U2 - 10.1016/j.red.2013.03.002
DO - 10.1016/j.red.2013.03.002
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AN - SCOPUS:84878415066
SN - 1094-2025
VL - 16
SP - 553
EP - 563
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
IS - 3
ER -