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College of Business Faculty’s Research Accepted to Top Journal
“When you start a project, you are always looking to make an impact in some way,” said Curtis Lockwood Reynolds, Ph.D., economics professor at the College of Business Administration. “You don’t know what is going to happen, but it’s nice when you get to see your work get published.”
Reynolds partnered with two other economics professors in the College of Business Administration, Jooyoun Park, Ph.D., and Shawn Rohlin, Ph.D., to study the impact of lay-offs in specific areas and the effect on the economy.
"Labor displacements due to foreign competition occur primarily in manufacturing. However, when workers are laid-off in a certain zip code, it affects the surrounding economy," Reynolds said. "We measured how these layoffs spread throughout the local economy and found that the effects spilled over into non-manufacturing sectors. We find less retail and service establishments in the ZIP code following trade-related displacements and a slower entry rate of new retail and service firms, with the negative effects growing over time."
Using a combination of data from the Trade Adjustment Assistance program, which helps workers who have lost their jobs because of international trade, and data they collected themselves, the researchers also found that this effect spills over into nearby zip codes. Reynolds said it affects areas with smaller populations more because they are less able to absorb the shock.
“When this happens, it lowers local incomes and businesses and could require local and state governments to find ways to bolster the local economy,” Reynolds said. “We are measuring the impacts so we have a better chance to make policies.”
Michelle Parrish Manning