Discussion Paper

Local Hangovers: How the Housing Boom and Bust Affected Jobs in Metro Areas

Abstract: What explains why some places suffered particularly severe job losses during the Great Recession? In this post, we extend our recent Current Issues article analyzing regional dimensions of the latest housing cycle and show that metropolitan areas that experienced the biggest housing booms and busts from 2000 to 2008 lost the most jobs during the recession. Not surprisingly, construction activity helps explain the tight link between housing and local job market performance. Given this pattern, we believe that each metro area’s boom-bust experience is likely to continue to influence its growth prospects for some time to come.

Keywords: Local Economic Performance; Housing;

JEL Classification: R3; R1;

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2011-08-29

Number: 20110829