Add to ORKGThis dissertation studies the macroeconomic implications of the reallocation of workers within and between labor markets. Chapter 1 starts from the fact that unemployment rates differ widely across local labor markets. I document that high local unemployment follows from elevated local job losing rates, even for similar workers. I then propose a theory in which spatial differences in job loss arise endogenously through the location decision of employers. Labor market frictions distort the latter, providing a rationale for commonly used place-based policies. The estimated model accounts for the cross-sectional dispersion in unemployment rates and the key role of job loss. Finally, I show that both real-world and optimal place-based policies ...