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Working Paper
Moving to Fluidity: Regional Growth and Labor Market Churn
This paper studies the connection between regional growth trends and labor market dynamics. New data on manufacturing worker flows for U.S. cities 1969-1981 show more new hires and more voluntary quits in growing cities, but more forced layoffs in shrinking cities. Recessions are special in growing cities in that hires and quits drop, whereas in shrinking cities layoffs rise. A quantitative business cycle model with migration and on-the-job search accounts for a large share of variation in growth and worker flows both over time and across space. Growing cities in the South and West had low ...