Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-2534-8164

Publication Date

1-27-2022

Series

Upjohn Institute working paper ; 22-362

DOI

10.17848/wp22-362

Abstract

This paper studies how government transfers respond to changes in local economic activity that emerge during recessions. Local labor markets that experience greater employment losses during recessions face persistent relative decreases in earnings per capita. However, these areas also experience persistent increases in transfers per capita, which offset 16 percent of the earnings loss on average. The increase in transfers is driven by unemployment insurance in the short run, and medical, retirement, and disability transfers in the long run. Our results show that nominally place-neutral transfer programs redistribute considerable sums of money to places with depressed economic conditions.

Issue Date

January 2022

Note

Upjohn project #44000

Sponsorship

We gratefully acknowledge funding from the 2018–2019 DOL Scholars Program (Contract # DOL-OPS-15-C-0060).

Subject Areas

ECONOMIC DEVELOPMENT; Local labor markets; Urban issues; Poverty and income support

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Citation

Hershbein, Brad J. and Bryan A. Stuart. 2022. "Place-Based Consequences of Person-Based Transfers: Evidence from Recessions." Upjohn Institute Working Paper 22-362. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/wp22-362