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Abstract for:

Relocation of Public Sector Workers: Evaluating a Place-based Policy

Giulia  Faggio,  February 2014
Paper No' SERCDP0155: | Full paper (pdf)
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Keywords: Economic development; regional labour markets; regional government policy; job displacement

JEL Classification: O1; R23; R58; J61

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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Abstract:

This paper investigates the local labor market impact of a UK relocation initiative, the 2014 Lyons Review. The review resulted in the dispersal of about 25,000 civil service jobs out of London and the South East towards other UK destinations. The paper aims to detect whether inflows of public sector jobs have crowded out private sector activity or stimulated the local provision of jobs in the private sector. By separately estimating direct and spillover effects, I find that the relocation programme raised private sector employment in the receiving areas and changed the sectoral distribution of local employment towards services and away from manufacturing. I also find evidence of displacement. Employers seem to move out of areas at 1-2km distance to a relocation site and move into areas at 0-1km distance. These agglomeration effects appear highly localised: the largest policy impact is found in areas that received the relocated jobs and spillover effects reduce sharply over distance.