Economic crisis accelerates urban structural change via inter-sectoral labour mobility

Daniel Straulino, Dario Diodato and Neave O'Clery

No 2022-02, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: Are recessions drivers of structural change? Here we investigate the resilience of cities, and argue that a re-allocation of labour between industrial sectors in times of crisis induces an acceleration in structural change. Using UK data, we find that cities experienced a sharp increase in inter-sectoral job transitions, and that local employment in skill-related sectors is most strongly associated with employment growth, during the recession, which we identify with the period of employment contraction between 2008 and 2011. This coincides with a massive but short-lived increase in the rate of structural change (i.e. the total change in employment shares of different industries) around 2009. These findings suggest that cities with skill-related sectors re-allocate workers in a crisis, thus inducing structural change.

Keywords: Cities; resilience; financial crisis; labour markets; structural change; labour mobility (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-lab, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:202202

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