A new historical data set on state unemployment rates shows that, with the exception of the COVID-19 recession, states have experienced the timing and timing of recessions in recent decades, according to a paper discussed in the Brookings Economic Activity Papers (BPEA). This indicates that they have similar experiences in terms of severity. ) Conference on March 29th.
The Bureau of Labor Statistics has reported monthly unemployment rates for each state since January 1976. Paper authors – Andrew J. Fieldhouse of Texas A&M University, David Munro of Middlebury College, Christopher Koch of Empirical Research Partners LLC, and Sean Howard of JERA Americas – Historical reports previously published by the Department of Labor and the Social Security Administration We developed alternative state-level unemployment rates dating back to January 1947 by digitizing new and continuing unemployment insurance claims from the United States.
Their paper, “The Emergence of a Uniform Business Cycle in the United States: Evidence from New Claims-Based Unemployment Data,” documents two important trends highlighted by the new dataset. The first is that a more even, slower-paced recovery is emerging. Since the 1960s. While the national unemployment rate has gradually recovered in recent decades, state unemployment rates have converged. Second, interstate migration, in which unemployed workers move to states where jobs are more plentiful, has not provided a significant stimulus to economic recovery since the mid-1980s.
The authors attribute the slowdown and convergence of the recovery rate to several factors, including the economy's shift from manufacturing to less volatile services, increasing similarity in the industrial mix of states, and increased national economic integration. It is said that there is. As a result, workers have much less incentive to move if they lose their jobs.
“If there aren't greener pastures elsewhere, why emigrate,” Munroe said in an interview with the Brookings Institution.
According to Fieldhouse, the paper's findings have important implications for economic stabilization policy. On the one hand, a more even business cycle argues for a stronger role for the federal government through fiscal policy (tax cuts and spending programs) and the monetary policy of the Federal Reserve. On the other hand, state-level policies targeting weak local labor markets are important because unemployed workers are no longer moving to other states.
The authors note that the most recent economic cycle, a deep but brief recession during the early months of the 2020 COVID-19 pandemic, followed by a sustained recovery, is something they have documented over the past 60 years. They point out that this is an exception to the convergence trend.
“Each state has had a very different experience during the coronavirus recession,” Fieldhouse said in an interview. “The disease has affected each state differently, with different timing, vaccination rates, and lockdown policies. In-person services have been challenged. States like Nevada, which rely on tourism, We experienced disruption, but other states were not as exposed to in-person services.”
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Quote
Fieldhouse, Andrew, Sean Howard, Christopher Koch, and David Munro. 2024. “The Emergence of a Uniform Business Cycle in the United States: Evidence from New Claims-Based Unemployment Data,” BPEA Conference Draft, Spring.
