Unemployment and State Variation in Unemployment Rates (Another Update)

Post date: Aug 5, 2011 3:21:08 AM

Dispersion in unemployment rates is a crude proxy for differing labor market conditions. As present both North and South Dakota have less than 5% unemployment rates. What is stopping the rest of California from coming East?

Ricardo Lagos recently suggested that I track down the dispersion in job finding rates. He thinks it will follow the same trend and that this type of dispersion can only persist in equilibrium if there is heterogeneity in moving costs.

Key Question: Can foreclosure delay explain this lack of mobility and persistent difference in labor market conditions? I think so, and I recently received a grant to flush out a paper I started in January on this topic with Lee Ohanian (separate from the Cato project).