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Why Does Unemployment Differ Persistently Across Metro Areas?: A Reprint from the Federal Reserve Bank of Kansas City Economic Review
Jordan Rappaport (au)
Unemployment rates differ widely and persistently across U.S. metro areas. Metros that have experienced high or low unemployment rates in one year have tended to stay that way 10 years and even 20 years later.Such variation and persistence raises questions: Why donäó»t households move from high long-term unemployment metros to low long-term unemployment metros? Why donäó»t firms in need of workers move from low long-term unemployment metros to high long-term unemployment metros? Although such moves may seem sensible, the author finds that a number of factors äóî a mismatch of worker skills to firms' hiring needs, different metro characteristics, and high moving costs äóî dampen worker and firm movement and allow unemployment rates to diverge. Figures and tables. This is a print on demand report.
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