The Geography of Job Creation and Destruction in the U.S. Manufacturing Sector, 1967–1997 (original) (raw)

The Birth, Death, and Persistence of Firms: Creative Destruction and the Spatial Distribution of U.S. Manufacturing Establishments, 2000–2006

This article deals with the dynamics of the U.S. manufacturing sector, analyzing the birth, death, and ongoing existence of firms in the beginning of the twenty-first century. Schumpeter's notion of creative destruction is hypothesized to explain the spatiotemporal dynamics of the distribution of manufacturing establishments. We implemented a partial adjustment model that accounts for spillover effects between counties, unknown forms of heteroskedasticity, and spatial autocorrelation. The steady-state equilibrium birth and death rates converged to 6.8 percent and 6.1 percent per year, respectively, during the 2000–06 period. We found that firm birth and death were not decisively affected by a creative destruction process during that period, but firm birth and death positively affect the survival (or persistence) rate of single-unit manufacturing firms.

The Changing Industrial Composition of Manufacturing-Based Regions, 1980-2005

SSRN Electronic Journal, 2008

The United States lost 4.5 million manufacturing jobs, about 24 percent of its manufacturing base, between 1980 and 2005. This loss, its causes, and its consequences for displaced workers and the nation as a whole, have been extensively studied and debated. Yet researchers have paid little attention to the kinds of jobs that have replaced the lost manufacturing jobs in manufacturingbased metropolitan areas that lost manufacturing jobs. These metropolitan areas, located primarily in the Great Lakes region, the Northeast, and the upper South, are the places in which the impacts of manufacturing job loss on the regional economy were, and generally still are, of greatest public concern. Policymakers in these regions need to understand how the industrial structures of their regional economies have changed if they are to craft effective industry-level policies to rebuild those economies. Such policies may be designed either to accommodate the changes that have occurred or to alter the growth pattern of the regional economy.

O R I G I N A L destruction and the geographical distribution of unemployment

This paper aims to provide a frame of mind to understand the link between structural change and regional unemployment, and, based on it, to survey the most recent literature. An overly optimistic view on the ability of the adjustment mechanism to generate convergence in local unemployment rates has long neglected the question of how regional imbalances arise in the first place. The availability of new longitudinal data sets allows us looking again at this issue with a fresh look, starting from patterns of reallocation among labour market statuses. The main conclusion of recent research is that high unemployment regions have a higher, not a lower rate of reallocation; this suggests, in turn, that they do not suffer from low job creation, but, rather, from high job destruction, and this is because of the low competitiveness of any economic activity. Our findings sound as a renowned justification of the need for demand side policy, especially aimed at increasing the life expectancy of private businesses in high unemployment regions. JEL Codes: J6, P2, R1, R23

Employment Dynamics, Spatial Restructuring, and the Business Cycle

Geographical Analysis, 2010

The multinodal metropolis is an evolving system, affected by both long-term restructuring and by business cycle dynamics. This study of the Dallas-Fort Worth Metroplex points, Prst, to the multiplicity and wide dispersion of employment centers within the region and, second, to the importance of vintage. During business cycle upswings new centers in new and more dispersed locations receive the preponderant share of new growth. During business cycle downswings, old activities are pruned most heavily f r m old locations. The result is an increasingly complex array of specialized agglomerations. Urban areas are being transformed by a combination of long-term economic restructuring, cyclical economic volatility, and the emergence of new metropolitan forms. The interactions between these forces is reshaping urban geography are, however, poorly understood. To address this problem, what we explore in this paper are their relationships, as evidenced by differential patterns of employment gain or loss in the Dallas-Forth Worth metroplex. There is a literature that relates the business cycle to the process of suburbanization, but it is contradictory and inconclusive. Some researchers (Kain 1975; No11 1970) have made the case that central city employment is likely to be more volatile than suburban employment in response to the business cycle, while others (Manson 1983; Nelson and Patrick 1975; Howland and Peterson 1988) have argued that suburbs face higher volatility.' Both groups seem to agree that suburbs are 'Kain (1975) and No11 (1970) have argued that central city employment is more sensitive to the business cycle, since the obsolete and inefficient ca ital stock, older infrastructure, and less educated labor force of central cities would be like1 to place tfese economies at a competitive disadvantage in an economic downturn, while suburbs woudbe in a better position with their advantages to capitalize on an economic upswin Manson (19831, Manson, Howland, and Peterson (1984). and Nelson and Patrick (1975). on the other fand, have suggested that suburbs will experience higher volatility in the business cycle. Howland (1984) and Howland and Peterson (1988) have su ported this view, suggesting that sensitivity to recession is higher for newer capital, and that smaller k m s are less able than large firms to downsize in response to economic contraction. The failure rates of small, new firms, then, would place newer suburban employment centers at a disadvantage in a recession.

Industrial Reallocation Across US Cities, 1977-1997

Journal of Urban Economics, 2004

Between 1977 and 1997, US employment shifted dramatically in favor of industries that used skilled labor intensively. During this same period, some cities withered while others prospered. This paper examines employment growth in 39 industries across 316 cities to ...

Thy neighbor’s jobs: geography and labor market dynamics

Regional Science and Urban Economics, 2003

This paper develops three explanations for the extent of correlation between neighboring geographic areas' economic outcomes. Export-oriented firms in neighboring counties might independently produce similar goods, or might be linked directly through the production of intermediate inputs. In either case, counties are exposed to similar demand shocks. Finally, regions share markets for goods and services that are both produced and consumed locally. Empirical results suggest that much of the 'risk' associated with economic decline in neighboring regions can be attributed to industrial similarity rather than direct dependence of jobs in one area on jobs in another. 

Industry Clustering and Unemployment in US Regions: An Exploratory Note

Much has been written by various scholars and practitioners over the years about the benefits of industrial clustering, whether the clustering revolves around mature industries or around new and innovative industries (innovation clustering). The benefits of such clustering or local agglomeration economies supposedly include greater regional exports, greater employment growth, greater payroll growth, and greater new business establishment creation, among other impacts. However, the work for this research note has not uncovered much if any literature on how agglomeration affects United States regional unemployment rates. In general, greater clustering is associated with lower US metro area unemployment rates on average, although this depends upon how one defines a cluster. Additionally, most growing industrial and innovation clusters over the last two decades or so require highly educated and skilled workers. Since most of the unemployed at any given time tend to be less educated and less skilled than most workers on average, local and state economic development policies that focus on clustering must be careful in targeting lower unemployment rates as a policy goal or outcome. On the other hand, greater clustering and greater industry concentration do not seem to be associated with greater levels of unemployment during stagnant economic times as some may expect. That is, it does not appear that diversity of industry has an advantage over industry clustering and concentration in bad economic times. Finally, the arguments that decentralized or local economic development planning is better for the macroeconomy than centralized planning at the national level is discussed in light of the results for industrial clustering found in this paper.

The Determinants of Geographic Concentration of Industry: A Quantitative Analysis

2011

Taking the early U.S. automobile industry as an example, we evaluate two competing hypotheses on geographic concentration of industry: local externalities versus employee spinoffs. Our findings suggest that both forces contribute to industry agglomeration through their specific channels, and the spinoff effect can be viewed as a special form of local externalities. Calibrating our model to the quantitative pattern of industry evolution reveals that traditional local externalities are main driving forces of agglomeration. Particularly, the local economy and related industries play an important role by fostering new entrants. Spinoffs play a secondary role and contribute to an increased concentration at later stages of the industry life cycle.