Abstract
The unemployment rate of US–Mexico border cities has stood remarkably higher than the US average. Using annual data from 1990 to 2005, we contrast large border MSAs (Brownsville, McAllen, Laredo, and El Paso in Texas and El Centro in California) to a panel of MSAs in the same states (Austin, Dallas, Houston, San Antonio, Los Angeles and San Francisco). Focusing on the industry composition of employment and population growth, we report several panel data results confirmed by error correction adjustment. First, the national unemployment rate does not help explain the local border cities unemployment but does so for the panel of large MSAs. Second, the relative employment indices have statistically significant effects only for the border panel: increases in employment concentration within an industry lead to higher local border unemployment. Third, higher population density lowers unemployment for border cities.
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