Rosario Didier

This paper examines how household structure shapes adjustment to regional economic shocks. Using geocoded data from the Panel Study of Income Dynamics, I analyze how individuals and couples respond to local labor demand shocks driven by differential exposure to the China Trade Shock, employing a difference-in-differences approach. I document three main findings. First, directly exposed individuals experience worse labor market outcomes, especially on the extensive margin: they are less likely to be employed and more likely to leave the labor force. Second, exposed individuals are more likely to leave their commuting zones during the shock. However, among couples, this migration response is asymmetric: out-migration increases when the husband is exposed but not when the wife is. Third, couples also adjust through an intra-household labor-supply margin: wives' labor force participation rises when husbands are exposed and falls when wives are exposed, while household income remains broadly unchanged. These findings suggest that adjustment to regional shocks depends not only on spatial mobility but also on how couples reallocate labor within the household. To interpret these patterns, I develop a spatial equilibrium model with singles and couples, joint location choices, migration frictions, gender-specific productivity shocks, and wives' endogenous labor supply. The model is used to study how household structure shapes the spatial transmission of regional shocks and their welfare consequences.