Economic Analysis of Effects of Business Cycles on the Economy of Cities: Cyclical Effects at the Local Level. A Microeconomic View

摘要

This study explores geographical differences in employment changes over the business cycle. A data base comprised of employment and location information on approximately 52,000 establishments was assembled for the peak year 1973, the trough year of 1975, the peak year 1979, and the recession year of 1982. This data base, gathered from four Dun and Bradstreet Market Indicators files, was merged with the Bureau of Census City Reference File to permit comparisons of central business district, central city, metropolitan, and nonmetropolitan areas. The analysis found that employment cycles varied geographically, even when industry mix was held constant. In general, areas where employment growth was greatest experienced the greatest fluctuation in employment. Employment loss during recessions was primarily due to large increases in plant closings and small reductions in establishment births. During expansions in the national economy, employment at continuing firms grew, firm birth rates increased slightly, and death rates fell dramatically. Although establishments' relocation patterns varied geographically, the business cycle had little effect on the movement of employment between central cities and suburbs and between metropolitan and nonmetropolitan areas. Areas where employment was growing most rapidly experienced the greatest employment variability. The results suggest that recessions dampen long-run growth in suburban areas where most manufacturing employment is growing rapidly. Tables, graphs, and 40 references are supplied.