Labor mobility over the business cycle
A bstract:
This paper studies the macroeco nomic effects of internal migration in an economy with labor market frictio ns and quantifies its role in mitigating asymmetric shocks. Labor mobility is viewed as a key mechanism to stabilize the economy from regional shocks in currency unions. However, this view does not consider the equilibrium ef fects of worker mobility in the presence of search frictions. First, I gath er new evidence connecting individual migration decisions to aggregate econ omic outcomes over the business cycle. I show that during the Great Recessi on in the United States labor flows across states strongly responded to cha nges in economic conditions. Moreover, I show that job-to-job transitions a ccount for most of the interstate movements, but during downturns, there is a significant increase in the relocation of unemployed workers across stat es. Then, I develop a general equilibrium model with local and aggregate bu siness cycles in which search frictions are crucial to generating the obser ved patterns in the data. I calibrate the model to the U.S. economy and stu dy the implications of labor mobility on local and aggregate labor markets.
DTSTAMP:20260408T151535Z DTSTART:20240325T143000Z DTEND:20240325T160000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR