DP16723 Cultural and recreational services as factors of city resilience? Evidence from big plant closures and downsizing
We combine census and establishment-level data for 2001--2017 to study the impact of big manufacturing plant closures and mass layoffs on city-level demographic changes in Canada. We find that big plant closures and mass layoffs significantly affect the composition of the cities' population. They cause a decrease in the share of residents aged 0--19 and 20--54, and an increase in the share of residents aged 55+. We also find that households with kids are more likely to stay and migrants are more likely to leave. Cities that initially have a larger population and a bigger share of their workforce in the cultural and recreational services are more resilient to large negative employment shocks. These mitigating effects are heterogeneous across age groups.
