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Accounting for Big City Growth in Low Paid Occupations: Immigration and/or Service Class Consumption

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  • Gordon, Ian
  • Kaplanis, Ioannis
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    Abstract

    Growth of 'global cities' in the 1980s was supposed to have involved an occupational polarisation, including growth of low paid service jobs. Though held to be untrue for European cities, at the time, some such growth did emerge in London a decade later than first reported for New York. The question is whether there was simply a delay before London conformed to the global city model, or whether another distinct cause was at work in both cases. This paper proposes that the critical factor in both cases was actually an upsurge of immigration from poor countries providing an elastic supply of cheap labour. This hypothesis and its counterpart based on growth in elite jobs are tested econometrically for the British case with regional data spanning 1975-2008, finding some support for both effects, but with immigration from poor countries as the crucial influence in late 1990s London. Keywords: regional labour markets; wages; employment; international migration; consumer demand JEL Codes: J21, J23, F22, R12

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    Bibliographic Info

    Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/184038.

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    Date of creation: 2012
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    Handle: RePEc:urv:wpaper:2072/184038

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    Related research

    Keywords: Mercat de treball; Salaris; Ocupació; Migracions de pobles; Economia regional; Consumidors; 33 - Economia;

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    1. Stewart, Mark B, 2002. " Estimating the Impact of the Minimum Wage Using Geographical Wage Variation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(0), pages 583-605, Supplemen.
    2. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
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