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

Eleonora Alabrese, Jacob Edenhofer, Thiemo Fetzer and Shizhuo Wang

No 15051, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Brexit; Economic impact; Evaluation; Trade barriers (search for similar items in EconPapers)
JEL-codes: D7 F6 H2 H3 H5 P16 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-int and nep-ure
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Citations: View citations in EconPapers (14)

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Working Paper: Measuring the Regional Economic Cost of Brexit: Evidence as of 2026 (2020)
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