How Mississippi is America’s Newfoundland

Here’s a map from Olivier Coibion, Yuriy Gorodnichenko, and Dmitri Koustas (PDF) showing the degree of hysteresis in different geographical parts of North America. Hysteresis is the economists’ term of art for the situation in which unemployment persists over time. People don’t get laid off and then find another job in a month or two. Instead, the whole regional economy settles into a new equilibrium where fewer people have jobs.

On the map, lower values mean less hysteresis, meaning that Newfoundland, Mississippi, Nova Scotia, and West Virginia seem to be the places with the most of it. The paper covers a lot of ground and doesn’t really fully explain anything, but one big takeaway is that regions with lower levels of educational attainment have much more unemployment persistence.