Urban labor markets are often said to be highly resilient, but it’s not always entirely clear why that is.  New research from MIT aims to fill in some gaps to map the job landscapes in cities across the US.

There is clearly a strong desire across policymakers, economists, and employers to understand the kind of factors that contribute to a healthy job market.  This is especially so as the world attempts to rebuild economies in the wake of the Covid-19 pandemic.

Traditional models have limited workers to narrowly defined jobs.  This doesn’t really reflect the real world in which jobs and sectors are more closely linked.  This allows displaced workers to transition to other jobs or sectors where their skills can be applied.  It’s a reality that sees the job market as akin to an ecosystem with a complex web of interactions.

Gauging resilience

In such ecosystems, resilience has often been determined by the connectedness of the network.  In other words, the more connections each node in the network has, the more able the network is to manage any shocks.

The researchers predicted that similar connectivity between jobs and the skills required would foster a similar level of resilience in the jobs market as people would be better able to transition between jobs, either due to their transferrable skills or the availability of jobs in adjoining regions.

They looked at data from the Bureau of Labor Statistics for every metropolitan area in the country during the period covering the Great Recession between 2007 and 2009.  This allowed them to create job landscape maps for each region, with the map not only including the number of jobs but also their geographic distribution and any overlap in the skills required to fulfill them.

Size matters

Both the size of the city and the diversity of employment available there were key determinants in the resilience it displayed.  Job connectivity was equally important, with cities with high job connectivity before the crash proving far more resilient afterward than those areas with less-connected jobs markets.

Of course, Covid and the financial crash are not the only shocks due to afflict the labor market, and so the researchers tested their model to explore how job markets might behave in the face of any automation-related job losses.

They found that, as before, those job markets with higher degrees of connectedness would be able to provide better opportunities for any workers displaced by new technologies.

The researchers believe that their findings highlight the importance of job connectivity and that policymakers should consider steps to increase this in order to enhance the resilience of job markets against any future shocks.