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Relocation of public sector workers: Evaluating a place-based policy

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  • Faggio, Giulia

Abstract

This paper investigates the local labor market impact of a UK relocation initiative – the 2004 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. This study aims to detect whether the inflow of public sector jobs crowded out private sector activity or stimulated the local provision of jobs in the private sector. Focusing on short-term effects, I find that the relocation initiative raised private sector employment in receiving areas and changed the sectoral distribution of local employment towards services. I also find evidence of displacement, i.e. a tendency for private businesses to locate closer to a relocation site, moving out of areas at 1–2 km and 2–3 km distances into areas at 0–1 km distance. These agglomeration effects appear highly localized: the largest policy impact is found in areas that received the relocated jobs with spillover effects reducing sharply over distance.

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  • Faggio, Giulia, 2019. "Relocation of public sector workers: Evaluating a place-based policy," Journal of Urban Economics, Elsevier, vol. 111(C), pages 53-75.
    • Handle: RePEc:eee:juecon:v:111:y:2019:i:c:p:53-75
    DOI: 10.1016/j.jue.2019.03.001
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    More about this item

    Keywords

    Regional labor markets; Regional government policy; Job displacement;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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