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Economic vulnerability in US metropolitan areas.

Gordon F Mulligan1

  • 1School of Geography, Development and Environment, University of Arizona, Tucson, AZ 85721 USA.

The Annals of Regional Science
|June 15, 2022
PubMed
Summary

Metropolitan areas face employment vulnerability due to industry specialization. This study quantifies unemployment rate volatility, identifying factors like manufacturing and primary activities that increase risk, while education and amenities may offer stability.

Area of Science:

  • Economics
  • Urban Studies
  • Labor Market Analysis

Background:

  • Economic shocks disproportionately affect metropolitan areas.
  • Industry specialization can increase employment vulnerability.
  • Understanding pre-COVID-19 vulnerability is crucial for future resilience.

Purpose of the Study:

  • To estimate the overall employment vulnerability of US metropolitan areas before COVID-19.
  • To identify key factors contributing to metropolitan unemployment rate volatility.
  • To explore the relationship between industry specialization and employment vulnerability.

Main Methods:

  • Utilized the Brechling-Thirlwall time-series approach to compare metropolitan and national unemployment rate changes.
  • Employed regression analysis to link unemployment rate volatility to initial economic and demographic conditions.
Keywords:
J21R12R23

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  • Correlated industry specialization indices (LQ) with unemployment rate volatility for at-risk sectors.

    • Main Results:

    • Metropolitan unemployment rate volatility was linked to specialization in primary and manufacturing sectors, initial unemployment levels, and government employment.
    • Factors such as human-created and natural amenities, real wages, self-employment, and presence of universities were associated with lower volatility.
    • Industry specialization, while common in advanced economies, was found to contribute to overall employment vulnerability.

    Conclusions:

    • Metropolitan employment vulnerability is influenced by a combination of industry structure, initial labor market conditions, and local characteristics.
    • Policies aimed at mitigating employment vulnerability should consider industry diversification and the role of local amenities and institutions.
    • The findings provide a baseline for assessing the impact of external shocks on diverse metropolitan economies.