Manufacturing Decline, Housing Booms, and Non-Employment
Kerwin Kofi Charles
University of Chicago - Irving B. Harris Graduate School of Public Policy Studies
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
University of Chicago - Booth School of Business
April 1, 2013
Chicago Booth Research Paper No. 13-57
We exploit cross-city variation in manufacturing decline and housing market changes during the 2000s, and jointly estimate their effects on non-employment. Both forces strongly affected non- employment between 2000 and 2007, with the increase from manufacturing decline almost exactly offset by reductions attributable to housing. We show that this offsetting occurred both in the aggregate and at the individual level. Moreover, we show that the housing bust undid the effects of the preceding housing boom, such that over the entire 2000s housing explains little of the aggregate non-employment increase, while manufacturing explains roughly 40 percent.
Number of Pages in PDF File: 51
JEL Classification: J21, E24, E32, R23
Date posted: June 4, 2013
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