The Impact of Labor Market Shocks on Household Financial Outcomes and Migration
Early Career Research Award
This project will study how local labor market shocks individual- and household-level financial outcomes. We will also try to answer if and to what extent the migration decisions of individuals in response to adverse local labor market shocks are affected by their financial portfolios (especially by home equity holdings). We will explore exogenous labor demand shocks induced by the emergence of China as a major player in international markets to design an instrumental variables strategy. Indeed, recent research has documented that regions specialized in industries facing stronger competition from China after its WTO accession experienced wage and employment declines relative to regions specialized in industries facing milder competition. Unique longitudinal data on individual- and household-level financial outcomes is provided by the Federal Reserve Bank of New York Consumer Credit Panel.