Evolution of inter-regional spatial mismatch in the USA: The role of skills and spatial structure

The literature on spatial mismatch often focuses on a mismatch within cities or local labour markets. This paper looks at the spatial mismatch between local labour markets. Using US data, we study the evolution of inter-regional mismatch between 1980 and 2010 and how this evolution varies across skill levels. Since we expect the spatial structure of supply and demand in the labour market to play a central role at this geographical level, we develop an extension of the spatial mismatch index, as the standard version does not take this spatial structure into account. Our results indicate that spatial mismatch has been increasing over the past decades, an increase that is largely attributable to spatial structure effects. The inter-regional spatial mismatch mainly affects low-skilled jobs and workers: our findings suggest that the degree of the spatial mismatch for low-skilled, relative to high-skilled workers, increased from a ratio of two in 1980 to almost four in 2010.