Job Search, Employment Density, and the Rate of Exit of Unemployment in Nonmetropolitan Labor Markets

ABSTRACT Little is known about the influences that em-ployment density and other local labor-market conditions have on transitions from unemployment to employment in nonmetropoli-tan areas. The empirical job search model developed in this paper finds that individual characteristics, unemployment rates, com-muting patterns, and trade and service sector growth all signifi-cantly influence the rate of exit of unemployment following job loss. Measures of local labor-market density, by contrast, appear to have little direct impact on the rate of exit of unemployment. The results of the paper suggest that the differential targeting of remote areas with job search assistance for displaced workers is not justified. Programs to assist nonmetropolitan labor market transitions must, on the other hand, recognize constraints that gender, race, and employment history create to the exit of unem-ployment