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Working Paper
Firm Entry and Macroeconomic Dynamics: A State-level Analysis
Using an annual panel of U.S. states over the period 1982-2014, we estimate the response of macroeconomic variables to a shock to the number of new firms (startups). We find that these shocks have significant effects that persist for many years on real gross domestic product, productivity and population. This is consistent with simple models of firm dynamics where a ?missing generation? of firms affects productivity persistently.
Journal Article
New from the Richmond Fed’s Regional Matters blog
Demographic Trends Are Major Factors in Today’s Weak Labor Force Growth
The size of the US labor force declined by 2.3 million people between December 2019 and December 2021, sparking widespread debate about the underlying factors constraining labor supply. Broadly speaking, changes in the overall size of the labor force come from changes in labor force participation rates (LFPRs), changes in the demographic makeup of the population, and changes in the size of the population. Research has documented the role of changes in LFPRs, especially the jump in the number of retired people (Briggs, 2021; Faria e Castro, 2021; and Kaplan et al., 2021) and the drop in the ...
Discussion Paper
Demographic Trends and Growth in Japan and the United States
Japan’s population is shrinking and getting older, with the population falling at a 0.2 percent rate this year and the working-age population (ages 16 to 64) falling at a much faster rate of almost 1.5 percent. In contrast, the U.S. population is rising at a 0.7 percent annual rate and the working-age population is rising at a 0.2 percent rate. So far, supporting the growing share of Japan’s population that is 65 and over has been the substantial increase in the share of working-age women entering the labor force. In contrast, U.S. labor force participation rates have been falling for ...
Journal Article
The Role of Immigration in U.S. Labor Market Tightness
Immigrants contribute a large portion of the growth in the U.S. population and labor force. However, immigration flows into the United States slowed significantly following immigration policy changes from 2017 to 2020 and the onset of the COVID-19 pandemic. Analysis of state-level data shows that this migration slowdown tightened local labor markets modestly, raising the ratio of job vacancies to unemployed workers 5.5 percentage points between 2017 and 2021. More recent data show immigration has rebounded strongly, helping to close the shortfall in foreign-born labor and ease tight labor ...
Journal Article
Workforce 2020: Is It Time for Disruptive Innovation?
Whether framed as a gap, a shortage or a mismatch, skill problems drive discussions around workforce and education policy today. Employers say they are not getting qualified candidates from educational institutions; unions and workforce advocates say that if employers looked harder and offered increased wages and improved benefits, qualified workers could be found. At the same time, community colleges and vocational training centers say that rapid changes in technology make it cost-prohibitive to buy the latest machines and training tools. Aspiring workers say they are unaware of the ...
Journal Article
An Analysis of African American Interstate Migration to Iowa
There are many motivations for family moves to other states. New jobs, lower crime rates and better schools are a few. A common rumor in Iowa is that many low-income blacks are relocating to the state from communities in Illinois, Wisconsin and elsewhere to take advantage of the state's generous welfare benefits. This article attempts to explore that assumption by clarifying who is moving to Iowa and why. The conclusion, based on census data and a brief review of the literature, is that although perception belies reality, the reality is more nuanced than one might expect.
U.S. Population Growth Slowed Further in 2020
This year will likely be the slowest annual population increase in U.S. history outside of wartime.
Journal Article
Looking for Progress in America's Smaller Legacy Cities: A Report for Place-based Funders
Place-based funders2 can play an important role in connecting economic growth to economic opportunity. Looking for Progress in America's Smaller Legacy Cities describes a study tour undertaken by representatives from four Federal Reserve Banks and more than two dozen place-based funders, under the auspices of the Funders? Network-Federal Reserve Philanthropy Initiative. What began as an inquiry into four small legacy cities ? Chattanooga, TN; Cedar Rapids, IA; Rochester, NY; and Grand Rapids, MI ? that appeared to have experienced some measure of revitalization in the post Great Recession ...
Journal Article
Education and the Evolution of Earnings Across Population Groups Since 2000
By nearly all macroeconomic measures, the US economy is in good shape: unemployment is low, jobs growth is steady, inflation is stable, and GDP has expanded uninterrupted for 10 years?the longest expansion in US history. The good news from the aggregate data means that most people are in the best economic position they have been in for some time. But by definition, aggregate data cannot tell us whether an overall good economy is benefitting some population groups more than others. This article disaggregates the good news in the macrodata by tracking the fortunes of a variety of population ...