Location-Specific Adjustments in Population and Employment across Metropolitan America

Abstract

This paper examines the joint adjustment of population and employment numbers across America’s metropolitan areas during the period 1990–2015. Current levels of both are estimated, for 10 year periods, using their lagged (own and cross) levels and eight other lagged variables. Population is affected by both human and natural amenities and employment by wages, patents, and other attributes of the workforce. This paper questions the conventional interpretation of the adjustment process by using geographically weighted regression (GWR) instead of standard linear (OLS, 2GLS) regression. Here the various estimates are all local, so the long-run equilibrium solutions for the adjustment process vary over space. Convergence no longer indicates a stable universal solution but instead involves a mix of stable and unstable local solutions. Local sustainability becomes an issue when making projections because employment can quickly lead or lag population in some metropolitan labor markets.