Two Views of the Geographic Distribution of Unemployment

Author:
  • SMStephen T. Marston
    Stephen T. Marston
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Abstract
This paper investigates the extent to which equilibrium and disequilibrium explanations can account for unemployment rate differentials between cities. It shows that shocks that disturb the steady-state relationship among the unemployment rates of metropolitan areas tend to be eliminated by mobility within a single year. It also shows that high unemployment areas tend to be those with attractive climates and amenities, high wages, and high unemployment insurance. It argues that the main effect of government programs that create jobs in high unemployment areas will be to lure additional job seekers to those areas.