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Recent Employment Growth in Cities, Suburbs, and Rural Communities Benjamin K. Couillard and Christopher L. Foote Federal Reserve Bank of Boston Research Department October 3, 2019 Couillard & Foote (Boston Fed) Recent Employment Growth

  1. .8 Commuting Zone's Total Employment .7 Densest's County Share of .6 .5 .4 .3 .2 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Suburbanization Trends: Empl. & Pop. Shares in Densest County 1964 Classifications Population .8 Density Percentile of CZ's Densest County Top 1% 96-99% 86-95% 1-85% .7 Commuting Zone's Population Densest's County Share of .6 .5 .4 .3 .2 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 6 / 22

  2. Suburbanization Trends: Empl. & Pop. Shares in Densest County 1964 Classifications Population Employment .8 .8 Density Percentile of CZ's Densest County Top 1% 96-99% Commuting Zone's Total Employment 86-95% 1-85% .7 .7 Commuting Zone's Population Densest's County Share of Densest's County Share of .6 .6 .5 .5 .4 .4 .3 .3 .2 .2 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 6 / 22

  3. 1964 2016 .5 .5 .4 .4 .3 .3 Log Average Payroll per Job Log Average Payroll per Job .2 .2 .1 .1 0 0 -.6 -.5 -.4 -.3 -.2 -.1 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 100 0 20 40 60 80 100 Density Percentile Density Percentile Earnings per Job Averages by Density Percentile Relative to population-weighted mean across all counties Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 7 / 22

  4. 2016 .5 .4 .3 Log Average Payroll per Job .2 .1 0 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 100 Density Percentile Earnings per Job Averages by Density Percentile Relative to population-weighted mean across all counties 1964 .5 .4 .3 Log Average Payroll per Job .2 .1 0 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 100 Density Percentile Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 7 / 22

  5. Earnings per Job Averages by Density Percentile Relative to population-weighted mean across all counties 1964 2016 .5 .5 .4 .4 .3 .3 Log Average Payroll per Job Log Average Payroll per Job .2 .2 .1 .1 0 0 -.6 -.5 -.4 -.3 -.2 -.1 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 100 0 20 40 60 80 100 Density Percentile Density Percentile Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 7 / 22

  6. 1964 2016 .5 .5 75th percentile 75th percentile .4 25th percentile .4 25th percentile .3 .3 Log Average Payroll per Job Log Average Payroll per Job .2 .2 .1 .1 0 0 -.6 -.5 -.4 -.3 -.2 -.1 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 85 95 100 0 20 40 60 80 85 95 100 Density Percentile Density Percentile Earnings per Job Dispersion: Inter-Quartile Range Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 8 / 22

  7. 2016 .5 75th percentile .4 25th percentile .3 Log Average Payroll per Job .2 .1 0 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 85 95 100 Density Percentile Earnings per Job Dispersion: Inter-Quartile Range 1964 .5 75th percentile .4 25th percentile .3 Log Average Payroll per Job .2 .1 0 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 85 95 100 Density Percentile Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 8 / 22

  8. Earnings per Job Dispersion: Inter-Quartile Range 1964 2016 .5 .5 75th percentile 75th percentile .4 25th percentile .4 25th percentile .3 .3 Log Average Payroll per Job Log Average Payroll per Job .2 .2 .1 .1 0 0 -.6 -.5 -.4 -.3 -.2 -.1 -.6 -.5 -.4 -.3 -.2 -.1 0 20 40 60 80 85 95 100 0 20 40 60 80 85 95 100 Density Percentile Density Percentile Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 8 / 22

  9. All Counties Bottom 85% of Counties .35 .35 .3 .3 Interquartile Range: Unweighted Interquartile Range: Unweighted .25 .25 .2 .2 .15 .15 .1 .1 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Percentiles 86–95 Densest 5% .35 .35 .3 .3 Interquartile Range: Unweighted Interquartile Range: Unweighted .25 .25 .2 .2 .15 .15 .1 .1 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 9 / 22

  10. County-Level Regression Model Timing: Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  11. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  12. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  13. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  14. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Regressors: Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  15. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Regressors: Average January temperature Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  16. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Regressors: Average January temperature Log population density and indicator for densest 5% of counties Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  17. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Regressors: Average January temperature Log population density and indicator for densest 5% of counties Manufacturing share of employment Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  18. County-Level Regression Model Timing: Regressions run separately year-by-year (not panel) Dependent Variable: Average earnings per job Regressors: Average January temperature Log population density and indicator for densest 5% of counties Manufacturing share of employment Log share of persons with bachelor’s degrees (interpolated from Census and ACS) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 10 / 22

  19. Spatial Specification Y t = X t β t + WX t γ t + ε t Y t = X t β t + WX t γ t + ( λ t W ε t + ν t ) � �� � error = ε t Weighting matrix W is “second-order contiguity matrix” Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 11 / 22

  20. Spatial Specification Y t = X t β t + WX t γ t + ε t Y t = X t β t + WX t γ t + ( λ t W ε t + ν t ) � �� � error = ε t Weighting matrix W is “second-order contiguity matrix” Neighboring variables will be weighted averages of X ’s in surrounding counties Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 11 / 22

  21. Spatial Specification Y t = X t β t + WX t γ t + ε t Y t = X t β t + WX t γ t + ( λ t W ε t + ν t ) � �� � error = ε t Weighting matrix W is “second-order contiguity matrix” Neighboring variables will be weighted averages of X ’s in surrounding counties Errors can also be spatially correlated Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 11 / 22

  22. Spatial Specification Y t = X t β t + WX t γ t + ε t Y t = X t β t + WX t γ t + ( λ t W ε t + ν t ) � �� � error = ε t Weighting matrix W is “second-order contiguity matrix” Neighboring variables will be weighted averages of X ’s in surrounding counties Errors can also be spatially correlated λ t measures strength of error correlation (“clumpiness” of residuals) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 11 / 22

  23. Spatial Specification Y t = X t β t + WX t γ t + ε t Y t = X t β t + WX t γ t + ( λ t W ε t + ν t ) � �� � error = ε t Weighting matrix W is “second-order contiguity matrix” Neighboring variables will be weighted averages of X ’s in surrounding counties Errors can also be spatially correlated λ t measures strength of error correlation (“clumpiness” of residuals) Estimate via GMM Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 11 / 22

  24. Manufacturing Shares in 1980 (.5,1] (449) (.4,.5] (447) (.3,.4] (505) (.2,.3] (544) (.1,.2] (525) [0,.1] (439) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 12 / 22

  25. Neighboring Manufacturing Shares in 1980 (.5,1] (207) (.4,.5] (521) (.3,.4] (772) (.2,.3] (666) (.1,.2] (544) [0,.1] (199) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 13 / 22

  26. Log Earnings Per Job: Average January Temperature January Temperature .02 0 -.02 -.04 -.06 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 14 / 22

  27. Log Population Density Top 5% Densest .15 .2 .15 .1 .1 .05 .05 0 0 -.05 -.05 1965 1975 1985 1995 2005 2015 1965 1975 1985 1995 2005 2015 Log Earnings Per Job: Density Regressors Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 15 / 22

  28. Top 5% Densest .2 .15 .1 .05 0 -.05 1965 1975 1985 1995 2005 2015 Log Earnings Per Job: Density Regressors Log Population Density .15 .1 .05 0 -.05 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 15 / 22

  29. Log Earnings Per Job: Density Regressors Log Population Density Top 5% Densest .15 .2 .15 .1 .1 .05 .05 0 0 -.05 -.05 1965 1975 1985 1995 2005 2015 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 15 / 22

  30. Log Share Bachelor Degrees Share Manufacturing .1 .06 .05 .05 0 .04 -.05 .03 .02 -.1 .01 -.15 1965 1975 1985 1995 2005 2015 1965 1975 1985 1995 2005 2015 Log Earnings Per Job: Education and Manufacturing Shares Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 16 / 22

  31. Share Manufacturing .1 .05 0 -.05 -.1 -.15 1965 1975 1985 1995 2005 2015 Log Earnings Per Job: Education and Manufacturing Shares Log Share Bachelor Degrees .06 .05 .04 .03 .02 .01 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 16 / 22

  32. Log Earnings Per Job: Education and Manufacturing Shares Log Share Bachelor Degrees Share Manufacturing .1 .06 .05 .05 0 .04 -.05 .03 .02 -.1 .01 -.15 1965 1975 1985 1995 2005 2015 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 16 / 22

  33. Spatial Error Term .9 .8 .7 .6 .5 1965 1975 1985 1995 2005 2015 Log Earnings Per Job: Spatial Error Term Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  34. Log Earnings Per Job: Spatial Error Term Spatial Error Term .9 .8 .7 .6 .5 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  35. Log Earnings Per Job: Spatial Error Term Spatial Error Term .9 .8 .7 .6 .5 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  36. Log Earnings Per Job: Spatial Error Term Spatial Error Term .9 Hypothesis: Starting in mid-1990s, superstar cities pull away from other .8 cities .7 .6 .5 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  37. Log Earnings Per Job: Spatial Error Term Spatial Error Term .9 Hypothesis: Starting in mid-1990s, superstar cities pull away from other .8 cities IQR of earnings rises at top end of .7 density distribution (seen earlier) .6 .5 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  38. Log Earnings Per Job: Spatial Error Term Spatial Error Term .9 Hypothesis: Starting in mid-1990s, superstar cities pull away from other .8 cities IQR of earnings rises at top end of .7 density distribution (seen earlier) Similar movements in superstar cities .6 constituent counties increase “clumpiness” of regression residuals ( λ t ) .5 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 17 / 22

  39. Review of Main Results Rural vs. urban Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  40. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  41. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  42. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  43. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  44. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. But dispersion starts rising in 1990s, probably b/c of superstar cities Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  45. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. But dispersion starts rising in 1990s, probably b/c of superstar cities Center cities vs. suburbs Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  46. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. But dispersion starts rising in 1990s, probably b/c of superstar cities Center cities vs. suburbs Evidence that employment suburbanization stalled for ≈ 20 commuting zones with densest core counties starting in 2000s Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  47. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. But dispersion starts rising in 1990s, probably b/c of superstar cities Center cities vs. suburbs Evidence that employment suburbanization stalled for ≈ 20 commuting zones with densest core counties starting in 2000s Less evidence for ≈ 50 cities with less-dense cores Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  48. Review of Main Results Rural vs. urban Relative earnings-per-job in densest 5% counties picks up in 1980s, even controlling for county’s college share and its manufacturing-employment share Low employment and population growth in 2000s “Superstar” cities vs. less-successful cities Conditional on county-level density, earnings-per-job dispersion generally declines for most of the sample period. But dispersion starts rising in 1990s, probably b/c of superstar cities Center cities vs. suburbs Evidence that employment suburbanization stalled for ≈ 20 commuting zones with densest core counties starting in 2000s Less evidence for ≈ 50 cities with less-dense cores Population suburbanization slows in 2000s for both groups Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 18 / 22

  49. Within-Group Manufacturing Employment Change By Initial Density Group and Year 1964 1973 1-85 1989 2000 1964 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Manufacturing Employment Growth by Density Group Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  50. Manufacturing Employment Growth by Density Group Within-Group Manufacturing Employment Change By Initial Density Group and Year 1964 1973 1-85 1989 2000 1964 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  51. Manufacturing Employment Growth by Density Group Within-Group Manufacturing Employment Change By Initial Density Group and Year 1964 1973 1-85 1989 2000 1964 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  52. Manufacturing Employment Growth by Density Group Growth in factory jobs in less-dense Within-Group Manufacturing Employment Change areas early in the sample period By Initial Density Group and Year 1964 1973 1-85 1989 2000 1964 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  53. Manufacturing Employment Growth by Density Group Growth in factory jobs in less-dense Within-Group Manufacturing Employment Change areas early in the sample period By Initial Density Group and Year 1964 Big losses everywhere post-2000 1973 1-85 1989 2000 1964 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  54. Manufacturing Employment Growth by Density Group Growth in factory jobs in less-dense Within-Group Manufacturing Employment Change areas early in the sample period By Initial Density Group and Year 1964 Big losses everywhere post-2000 1973 1-85 1989 2000 For manufacturers, 21st century has 1964 been an equal opportunity disemployer 1973 86-95 1989 2000 1964 1973 96-99 1989 2000 1964 1973 100 1989 2000 -4 -2 0 2 4 Annualized Percentage Growth Rate Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 19 / 22

  55. .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  56. .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Human capital differences are likely important (Russ and Shambaugh 2019) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  57. .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Human capital differences are likely important (Russ and Shambaugh 2019) Paper develops a potential spatial angle: Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  58. .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Human capital differences are likely important (Russ and Shambaugh 2019) Paper develops a potential spatial angle: Being surrounded by other manufacturing counties partially “insulated” a county from factory-job losses—until 1995 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  59. Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Human capital differences are likely important (Russ and Shambaugh 2019) Paper develops a potential spatial angle: Being surrounded by other manufacturing counties partially “insulated” a county from factory-job losses—until 1995 Spatial error term from manufacturing-share regression: .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  60. Additional Questions Related to Manufacturing Share 1 Why have recent declines in the US manufacturing share had such large effects on local communities? (Charles, Hurst and Schwartz 2018) Human capital differences are likely important (Russ and Shambaugh 2019) Paper develops a potential spatial angle: Being surrounded by other manufacturing counties partially “insulated” a county from factory-job losses—until 1995 Spatial error term from manufacturing-share regression: .85 .75 .65 .55 1965 1975 1985 1995 2005 2015 Implication: Current job-losers less able to diversify than earlier job losers Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 20 / 22

  61. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  62. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  63. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  64. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 2 Secretaries, stenographers, and typists (“routine cognitive”) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  65. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 2 Secretaries, stenographers, and typists (“routine cognitive”) Foote and Ryan (2014): Routine-cognitive share of employment rises until 1990s—then declines Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  66. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 2 Secretaries, stenographers, and typists (“routine cognitive”) Foote and Ryan (2014): Routine-cognitive share of employment rises until 1990s—then declines Autor (2019): Decline in urban premium for non-college workers comes mostly after 2000 Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  67. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 2 Secretaries, stenographers, and typists (“routine cognitive”) Foote and Ryan (2014): Routine-cognitive share of employment rises until 1990s—then declines Autor (2019): Decline in urban premium for non-college workers comes mostly after 2000 Suggests that technological obsolescence of routine-cognitive workers is to blame Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  68. Additional Questions Related to Manufacturing Share 2 How does the timing of manufacturing declines in various counties relate to rising within-city earnings inequality (Baum-Snow et al. 2018, Autor 2019)? CEA analysis (2015): Occupations with largest job losses from 1989–2014: Machine operators (“routine manual”) 1 2 Secretaries, stenographers, and typists (“routine cognitive”) Foote and Ryan (2014): Routine-cognitive share of employment rises until 1990s—then declines Autor (2019): Decline in urban premium for non-college workers comes mostly after 2000 Suggests that technological obsolescence of routine-cognitive workers is to blame A technological reallocation of traditional office tasks away from non-college workers would have large implications for urban/housing policy Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 21 / 22

  69. The End Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  70. .5 .5 Density Percentile of CZ's Densest County Density Percentile of CZ's Densest County Share of National Population in Density Group Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% Top 1% 96-99% 86-95% 1-85% .4 .4 .3 .3 .2 .2 .1 .1 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Commuting Zones: Population Shares Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  71. .5 Density Percentile of CZ's Densest County Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% .4 .3 .2 .1 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Commuting Zones: Population Shares 1964 County Classifications .5 Density Percentile of CZ's Densest County Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% .4 .3 .2 .1 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  72. Commuting Zones: Population Shares 1964 County Classifications 2016 County Classifications .5 .5 Density Percentile of CZ's Densest County Density Percentile of CZ's Densest County Share of National Population in Density Group Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% Top 1% 96-99% 86-95% 1-85% .4 .4 .3 .3 .2 .2 .1 .1 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  73. Commuting Zones: Population Shares 1964 County Classifications 2016 County Classifications .5 .5 Density Percentile of CZ's Densest County Density Percentile of CZ's Densest County Share of National Population in Density Group Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% Top 1% 96-99% 86-95% 1-85% .4 .4 .3 .3 .2 .2 .1 .1 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Evidence for population growth in middle two tiers in both panels (lt. blue and tan) Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  74. Commuting Zones: Population Shares 1964 County Classifications 2016 County Classifications .5 .5 Density Percentile of CZ's Densest County Density Percentile of CZ's Densest County Share of National Population in Density Group Share of National Population in Density Group Top 1% 96-99% 86-95% 1-85% Top 1% 96-99% 86-95% 1-85% .4 .4 .3 .3 .2 .2 .1 .1 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 1964 data. Note: Commuting zones defined using 1990 data. Densest county of CZ defined using 2016 data. Evidence for population growth in middle two tiers in both panels (lt. blue and tan) Rappaport (2018): Faster growth of “larger, less-crowded locations” Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  75. Theories of Earnings Inequality Canonical Model Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

  76. Theories of Earnings Inequality Canonical Model Technical progress has been biased toward skilled workers throughout the 20th/21st centuries Couillard & Foote (Boston Fed) Recent Employment Growth October 3, 2019 22 / 22

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