VoxEU Video Politics and economics
Why do some regions fail to recover from economic shocks?
Recorded at CEPR’s June Paris Symposium, Tony Venables presents his research on those regional disparities in the UK which originated in the 1970s through negative trade and technology shocks and whose long run consequences are still visible today. Using disaggregated historical spatial data for the UK, with regards to employment by sector and earnings by place, he finds a relationship between the composition of employment and average earnings in the same place: the more tradable the employment structure in a place, the higher its income. He also finds that the policies adopted at that time in the UK focused on creating more jobs, however this employment remained, in the long run, low-value.