Employment and Wages in the Places Left Behind
- 40 Downloads
In recent decades, labor force participation across the United States has declined but the reasons remain unclear. While some point to structural changes in the labor market composition as the driving factor, others argue that increases in the take-up of welfare and disability payments are to blame. Most existing studies document trends driven by labor market performance in major metropolitan areas. In this chapter, we analyze recent trends in the employment-to-population ratio and real wages, focusing instead on nonmetropolitan areas—the places left behind. Nonmetro areas have not recovered as quickly as metro areas have from the Great Recession. Less-educated workers in nonmetro areas employed in the manufacturing sector have fared the worst in terms of real wages. Overall, our results suggest that the decline in labor force participation rates in rural areas can be explained by a relative reduction in productivity rather than changes in welfare take-up.
KeywordsEmployment trends Labor force participation Rural productivity Postrecession wages Places left behind
- Aaronson, S., Cajner, T., Fallick, B., Galbis-Reig, F., Smith, C., & Wascher, W. (2014, September). Labor force participation: Recent developments and future prospects (Finance and Economics Discussion Series Working Paper). Washington, DC: Federal Reserve Board. Retrieved from https://www.federalreserve.gov/pubs/feds/2014/201464/201464pap.pdf.
- Borjas, G. J. (2003).The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market (Working Paper No. 9755). Cambridge, MA: National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w9755.
- Borjas, G. J. (Ed.). (2007). Mexican immigration to the United States. Chicago: University of Chicago Press.Google Scholar
- Brown, J. P. (2014). Production of natural gas from shale in local economies: A resource curse or blessing? Economic Review, 99(1), 119–147.Google Scholar
- Carlino, G., & Mills, L. (1996). Convergence and the U.S. states: A time-series analysis. Journal of Regional Science, 36(4), 597–616. https://doi.org/10.1111/j.1467-9787.1996.tb01120.xCrossRefGoogle Scholar
- Cromartie, J. (2017). Rural America at a glance. (Economic Information Bulletin 182). Washington, DC: United States Department of Agriculture, Economic Research Service. Retrieved from https://www.ers.usda.gov/webdocs/publications/85740/eib-182.pdf?v=0.
- Elsby, M. W., Hobijn, B., & Sahin, A. (2010). The labor market in the great recession (Working Paper No 15979). Cambridge, MA: National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w15979.
- Krugman, P. (2018, March 24). Trade and the cities (Wonkish). The New York Times. Retrieved from https://www.nytimes.com/2018/03/24/opinion/trade-and-the-cities-wonkish.html
- Partridge, M. D., Rickman, D. S., Ali, K., & Olfert, M. R. (2010). Recent spatial growth dynamics in wages and housing costs: Proximity to urban production externalities and consumer amenities. Regional Science and Urban Economics, 40(6), 440–452. https://doi.org/10.1016/j.regsciurbeco.2010.05.003CrossRefGoogle Scholar
- Partridge, M. D. & Tsvetkova, A. (2018). Local ability to “rewire” and socioeconomic performance: Evidence from U.S. counties before and after the Great Recession. (Unpublished manuscript).Google Scholar
- Perez-Silva, R., Partridge, M. D., & Foster, W. E. (2018). Are foreign-born researchers more innovative? Self-selection and the production of knowledge among PhD recipients in the USA. Journal of Geographical Systems, 1–38. https://doi.org/10.1007/s10109-018-0281-6
- Rothstein, J. (2011). Unemployment insurance and job search in the Great Recession (pp. 143–214). Washington, DC: Brookings Papers on Economic Activity. https://www.brookings.edu/wp-content/uploads/2011/09/2011b_bpea_rothstein.pdfCrossRefGoogle Scholar
- Tsvetkova, A., & Partridge, M. D. (2018). Knowledge-based service economy and firm entry: An alternative to the Knowledge Spillover Theory of Entrepreneurship. Small Business Economics. https://www.researchgate.net/publication/329911566_Knowledge-based_service_economy_and_firm_entry_An_alternative_to_the_Knowledge_Spillover_Theory_of_Entrepreneurship