Abstract :
ConsiderablelabormobilityexistsacrossUSstates,enoughthat,ifmigrationarbitrages
localunemployment,onemightexpectverylowunemploymentdifferencesacross
states.However,cross-statedatareveallargeunemploymentdifferences.Anequilibrium
multi-locationmodelwithstochasticworker-locationmatchproductivityandwithin-
locationtradingfrictionscanaccountforthesefacts.Inthemodel,someworkersmove
to, orstayin,alocationwithhighunemploymentbecausetheyaremoreproductive
therethanelsewhere.Accordingtothemodel,labormobilityandaggregateunemploy-
mentarenegativelyrelated.Thispredictionisinstarkcontrasttostandardsectoral
reallocationtheory,butconsistentwiththeUSdata
