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
Jacob Edenhofer: University of Oxford
Thiemo Fetzer: University of Warwick
Shizhuo Wang: New York University

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

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 grossdisposable 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.

Keywords: Brexit; Regional inequalities; synthetic control; economic integration; subnational GDP JEL codes: F15; H72; R11; C21 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1617

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