This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. ASSA Annual Meeting
  3. 2022
  4. Preliminary Program
  5. Adjustment and Resilience to Economic Shocks
« Back to Results

Adjustment and Resilience to Economic Shocks

Paper Session

Friday, Jan. 7, 2022 3:45 PM - 5:45 PM (EST)

Hosted By: Labor and Employment Relations Association
  • Chair: David Autor, Massachusetts Institute of Technology

Do Regional Universities Make Their Local Economy More Resilient?

Greg Howard
,
University of Illinois-Urbana-Champaign
Russell Weinstein
,
University of Illinois-Urbana-Champaign
Yuhao Yang
,
University of Illinois-Urbana-Champaign

Abstract

We use a novel identification strategy to investigate whether regional universities make their local economies more resilient to adverse economic shocks. Our strategy is based on state governments assigning normal schools (to train teachers) and insane asylums to counties between 1830 and 1930. Normal schools later became much larger regional universities while asylum properties mostly continue as small state-owned psychiatric health facilities. Because site selection criteria were similar for these two types of institutions, comparing counties assigned a normal school versus an insane asylum identifies the effect of a regional university. We find that having a regional university roughly offset the negative effects of exposure to manufacturing declines, and we attribute a significant share of this resilience to the resilience of regional public university spending.

The Sources of Local Labor Market Hysteresis after Recessions

Christopher Goetz
,
U.S. Census Bureau
Brad Hershbein
,
W.E. Upjohn Institute for Employment Research
Bryan Stuart
,
Federal Reserve Bank of Philadelphia

Abstract

U.S. local labor markets with greater employment declines during recessions experience reductions in economic activity - including employment, employment-population ratios, and earnings per capita - that are highly persistent. This paper explores the sources of local labor market hysteresis over the last 50 years. We estimate generalized difference-in-difference regressions that combine cross-sectional variation in recession severity with several confidential datasets from the U.S. Census Bureau that track workers and employers over time. Our results have not undergone disclosure review yet, but we will present the answers to several questions: (1) To what degree is local labor market hysteresis driven by changes in the composition of workers residing in an area, as opposed to lasting effects on individuals? (2) To what degree is local labor market hysteresis driven by increased job destruction or decreased job creation? (3) To what degree is local labor market hysteresis driven by changes in assortative matching between high-wage workers and high-wage employers? (4) How do employers adjust along other margins, such as the skills demanded in their job postings and capital investment? The results will deepen our understanding of how recessions affect workers and employers, which is critical for designing appropriate policy responses.

Mismatch In Local Labor Markets: How Demand Shocks To Different Types Of Jobs Affect Diverse Local Labor Markets

Timothy J. Bartik
,
W. E. Upjohn Institute for Employment Research

Abstract

This paper estimates the effects on labor market outcomes of local labor demand shocks to different types of occupations. Occupations are divided into three groups, “high, middle, and low,” with occupations differing in wages paid and education credentials required. In a wide variety of commuting zones, and for many groups, increases in mid-occupation jobs—jobs which pay relatively well compared to required credentials, such as many jobs in manufacturing—have positive effects on labor market outcomes. These positive effects tend to be stronger for more disadvantaged groups, such as groups with less education. In commuting zones with high employment rates, and for less-educated groups, increases in high-occupation jobs tend to negatively affect labor market outcomes, possibly because of effects on in-migration that push up local prices without strong direct effects on wages and employment of less-educated groups. For the less-educated group and for Black workers, and in commuting zones (CZs) which at baseline had high employment rates and low college grad percents, low-occupation demand shocks have positive outcomes. For more-educated workers, low-occupation demand shocks tend to have negative effects on real wages.

Discussant(s)
Claudia Macaluso
,
Federal Reserve Bank of Richmond
Till M. von Wachter
,
University of California-Los Angeles
Bruce I. Sacerdote
,
Dartmouth University
JEL Classifications
  • J2 - Demand and Supply of Labor
  • J1 - Demographic Economics