In this article we explore the effects of labor demand shifts and populatio
n adjustments across metropolitan areas on the employment and earnings of v
arious demographic groups during the 1980s. We find that population shifts
across areas at least partially offset the effects of these demand shifts,
but less-educated workers showed substantially lower population adjustments
in response to these demand shifts. These limited supply responses apparen
tly contributed importantly to relatively greater deterioration of employme
nt and earnings of these groups in declining areas during the 1980s.