Measuring the Regional Economic Cost of Brexit: Evidence as of 2026

Eleonora Alabrese, Jacob Edenhofer, Thiemo Fetzer and Shizhuo Wang
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Eleonora Alabrese: University of Bath, SAFE and QAPEC.
Jacob Edenhofer: University of Oxford
Shizhuo Wang: University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: This paper examines the regional distribution of Brexit's economic costs across the United Kingdom. We apply a synthetic control approach to two complementary outcomes - real gross value added (GVA) and nominal gross disposable household income (GDHI) - covering multiple levels of UK spatial aggregation. We construct placebo-weighted ensemble counterfactuals using both post-2016 and post-2020 treatment windows. We document three main findings. Economic losses are large and geographically widespread: around 70% of local authority districts record output or income below their synthetic counterfactual. Losses are unevenly distributed. They are concentrated in initially prosperous and trade-integrated regions, particularly London, the South East, and Scotland, while less affluent areas experience comparatively smaller declines. This pattern is consistent with a process of "levelling down": Brexit has reduced regional inequality not by improving economic performance in lagging areas, but by disproportionately weakening leading ones. Northern Ireland is a clear exception, having been partly insulated from these losses by its continued access to key elements of the EU single market. (Previously titled: "Measuring the Regional Economic Cost of Brexit: Evidence up to 2019" Revised June 2026)

Keywords: Brexit; Regional Inequalities; Synthetic Control; Economic Integration; Subnational GDP JEL Classification: F15; H72; R11; C21 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-geo and nep-int
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Citations: View citations in EconPapers (13)

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