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Employment Risk in U.S. Metropolitan and Nonmetropolitan Regions: the Influence of Industrial Specialization and Population Characteristics

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A dynamic labor market model is used to motivate the inclusion of population characteristics and industrial structure as determinants of regional employment instability. We examine how these factors influence regional employment instability using data from both metropolitan and nonmetropolitan regions in the United States. We find that population characteristics are important determinants of employment volatility and that increased industrial specialization (reduced diversification) increases employment volatility, but the magnitude of that influence drops substantially once population characteristics are considered. We also find that the influence of population characteristics and industrial specialization varies significantly across metropolitan and nonmetropolitan regions.

Document Type: Research Article


Affiliations: 1: Bureau of Business and Economic Research, College of Business and Economics West Virginia University, Morgantown 2: Department of Economics and Bureau of Business Research, College of Business Administration, University of Nebraska, Lincoln

Publication date: August 1, 2004

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