A BEJM Contributions article.

Abstract

Since the seminal work of Blanchard and Katz, it has been widely believed that interstate migration causes state-level employment rates in the United States to revert rapidly to normal following a regional employment shock. This paper identifies two sources of bias in conventional estimates of the dynamics of regional labor markets: small sample bias stemming from the use of short time series, and measurement error in survey based series for employment status at the state level. Estimates that use more reliable series and correct for these biases suggest little or no mean reversion in state-level employment rates. Thus the perception that U.S. regional labor markets are highly flexible appears to be incorrect.

Erratum

In preparing the final version of the article, the authors inadvertently deleted a reference to the important earlier work of Bartik. Bartik ("Who Benefits from Local Job Growth: Migrants or the Original Residents?" Regional Studies 1993, 27:4, 297-311) pointed out that Blanchard and Katz's results were biased for several reasons, including the presence of measurement errors in participation and unemployment rates. However, his specific way of addressing measurement error, and his other criticisms of Blanchard and Katz, were quite different from those in the present paper.

Submitted: September 19, 2005 · Accepted: March 27, 2006 · Published: April 11, 2006

Originally published in Contributions to Macroeconomics.

Recommended Citation

Rowthorn, Robert and Glyn, Andrew J. (2006) "Convergence and Stability in U.S. Employment Rates," Contributions to Macroeconomics: Vol. 6 : Iss. 1, Article 4.
Available at: http://www.bepress.com/bejm/contributions/vol6/iss1/art4