Since the recession began, economists worried that the housing market collapse was likely to exacerbate prolonged unemployment. They feared that underwater homeowners would be unable to move to another region or state where the job market was stronger. That's why jobless residents of Nevada, where the unemployment rate was 14.2% in June, aren't all moving to North Dakota, where the unemployment rate was just 3.6%. Okay, that might not be the only reason.
But it turns out theory conformed very well to reality in this case. Michael Fletcher from the Washington Post provides some statistics:
With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 -- a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.
Read the full story at the Washington Post.
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