Comparing the New England and Southern California Regional Recessions

Abstract

During the early 1990s, both New England and Southern California experienced regional recessions that were much more severe than the national recession of 1990-1991. At first glance, these regional recessions appear to be similar phenomena. However, shift-share analysis conducted at the 3-digit Standard Industry Classification (SIC) level indicates that the underlying causes of the recessions were different. During the late 1980s and early 1990s, New England's manufacturing industries did not perform nearly so well as their national counterparts in creating new jobs and preventing job losses. The loss of regional competitiveness was the main factor explaining that region's recession. On the other hand, most of Southern California's industries performed about as well as their national counterparts during the recession. For Southern California, the industry structure of the region-in particular, its heavy reliance on defense-related production-contributed to the recession more than did a loss of regional competitiveness. Copyright 1996 Western Economic Association International.

Convergence and Mobility: Personal Income Trends in U.S. Metropolitan and Nonmetropolitan Regions

“…For example, the Sacramento-Stockton-Yolo, California, zone fell within the distribution primarily because of relatively slow growth in the agriculture-intensive Stockton-Lodi MSA. The large Los Angeles-Orange County-Riverside-Ventura, California, metropolitan zone transited down within the distribution, due in part to weak performance driven by the national defense/ aerospace restructuring of the 1990s (Ong et al 2003;Hoffmann, Robinson, and Subramanian 1996;Grobar 1996). Overall, manufacturing employment accounted for 20.5 percent of nonfarm employment in the downwardly mobile zones in 1980, compared to 16.5 percent in the upwardly mobile major metropolitan zones.…”

Unions and Employment Growth: Evidence from State Economic Recoveries

“…Wage Pressures In many cases, wage flexibility is an important factor in economic recovery (for an interesting application to recent recoveries, see Grobar 1996), so union contracts may affect the recovery rate. After a recession, if union contracts limit the downward adjustment of wages, labor market adjustments would be slower.…”

Regional Housing Prices in the USA: An Empirical Investigation of Nonlinearity

“…For example, positive shocks to technology fueled an economic expansion in the Northeast from 1977-1988, referred to as the "Massachusetts Miracle" (Coulson and Steven 1995), leading to an annual appreciation rate of 11.2% over this period. This was followed by a fall in regional competitiveness (Grobar 1996) that led to contractionary phase when home prices fell from 1988 to 1995 at an annual percentage rate of 1.68%. 4 In the case of the 1985-1991 upswing in the West, nominal home prices increased at an annual rate of 5.96%, and then fell during the subsequent downturn at an annual rate of 1.41% until 1993.…”