@article{TEXTUAL, recid = {5592}, author = {Notowidigdo, Matthew J.}, title = {The Incidence of Local Labor Demand Shocks}, journal = {Journal of Labor Economics}, address = {2020-05-27}, number = {TEXTUAL}, abstract = {Low-skill workers are comparatively immobile. This paper estimates the role of housing prices and social transfers in accounting for this fact using a spatial equilibrium model. Reduced-form estimates using US census data show that positive local labor demand shocks increase population more than negative shocks reduce population, that this asymmetry is larger for low-skill workers, and that such an asymmetry is absent for average wages, housing values, and rental prices. Generalized method of moments estimates reveal that the comparative immobility of low-skill workers is due not to higher mobility costs but to a lower incidence of adverse labor demand shocks.}, url = {http://knowledge.uchicago.edu/record/5592}, }