Deriving Empirical Definitions of Spatial Labor Markets: The Roles of Competing Versus Complementary Growth

If economic growth elsewhere raises the individual's earning prospects relative to those in the present location, then the individual will move. However, if the individual can exploit the economic growth elsewhere by commuting, he will not need to move to profit from the expansion. County-level data from eight states in the Midwest over the period 1969-1994 are used to show that local county population responds positively to own-county economic growth, economic growth in the adjacent county, and even economic growth two counties away. The magnitude of the effect decreases as distance from the county increases, and turns negative beyond a three county radius.