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Economic crisis, urban structural change and inter-sectoral labour mobility

Author

Listed:
  • Straulino, Daniel
  • Diodato, Dario
  • O’Clery, Neave

Abstract

Are recessions drivers of structural change? Here we investigate employment dynamics in the UK and show that a re-allocation of labour between industrial sectors in times of crisis induces an acceleration in structural change. Our key hypothesis is that cities with industrial baskets that exhibit strong potential for inter-industry labour mobility are more resilient as they can shift workers between sectors resulting in employment growth in some sectors — which in turn induces structural change during an economic crisis. Probing this hypothesis, we find that UK cities experienced a sharp increase in the rate of structural change at the city level around 2009 which coincided with an increase in inter-sectoral job transitions during the recession (2008–11) which persisted for years afterwards. To shed light on this, we deploy an econometric model to show that local employment in skill-related sectors, which captures the potential for inter-industry labour mobility, is most strongly associated with city-industry employment growth during the recession period.

Suggested Citation

  • Straulino, Daniel & Diodato, Dario & O’Clery, Neave, 2024. "Economic crisis, urban structural change and inter-sectoral labour mobility," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 135-144.
    • Handle: RePEc:eee:streco:v:71:y:2024:i:c:p:135-144
    DOI: 10.1016/j.strueco.2024.06.009
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    More about this item

    Keywords

    Cities; Resilience; Financial crisis; Labour markets; Structural change; Labour mobility;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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