Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/172238 
Year of Publication: 
2017
Series/Report no.: 
Upjohn Institute Working Paper No. 17-276
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
This paper analyzes an important shock to local labor demand in the financial services sector: firm relocation to Delaware following a Supreme Court ruling and state legislation in the 1980s. Using synthetic controls and bordering states, I find significant effects on employment growth, the unemployment rate, and participation in the first decade. Employment spillovers to the nontradable sector and migration appear larger than estimates from shocks to the tradable sector. Effects persist for 10 to 20 years after Delaware loses its original policy-induced advantage. The shift towards a low unemployment sector explains this persistence, rather than direct productivity effects or agglomeration.
Subjects: 
Labor demand shocks
regulatory competition
migration
local labor markets
JEL: 
R10
J20
G20
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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