IDEAS home Printed from https://ideas.repec.org/a/bla/ecgeog/v90y2014i1p67-90.html
   My bibliography  Save this article

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

Author

Listed:
  • Ian Richard Gordon
  • Ioannis Kaplanis

Abstract

The growth of “global cities” in the 1980s was supposed to have involved an occupational polarization, including the increase in low-paid service jobs. Although 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 article proposes that the critical factor in both cases was actually an upsurge of immigration from poor countries that provided an elastic supply of cheap labor. This hypothesis and its counterpart based on the 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.

Suggested Citation

  • Ian Richard Gordon & Ioannis Kaplanis, 2014. "Accounting for Big-City Growth in Low-Paid Occupations: Immigration and/or Service-Class Consumption," Economic Geography, Clark University, vol. 90(1), pages 67-90, January.
  • Handle: RePEc:bla:ecgeog:v:90:y:2014:i:1:p:67-90
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/ecge.12026
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. M. W. Reder, 1964. "Wage Structure and Structural Unemployment," Review of Economic Studies, Oxford University Press, vol. 31(4), pages 309-322.
    2. Francesca Mazzolari & Giuseppe Ragusa, 2013. "Spillovers from High-Skill Consumption to Low-Skill Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 74-86, March.
    3. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The impact of immigration on the structure of male wages: theory and evidence from Britain," LSE Research Online Documents on Economics 19797, London School of Economics and Political Science, LSE Library.
    4. Kaplanis, Ioannis, 2010. "Wage effects from changes in local human capital in Britain," LSE Research Online Documents on Economics 33615, London School of Economics and Political Science, LSE Library.
    5. Timothy J. Hatton & Massimiliano Tani, 2005. "Immigration and Inter-Regional Mobility in the UK, 1982-2000," Economic Journal, Royal Economic Society, vol. 115(507), pages 342-358, November.
    6. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    7. Ioannis Kaplanis, 2006. "The Geography of Employment Polarisation in Britain," ERSA conference papers ersa06p597, European Regional Science Association.
    8. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    9. Gordon, Ian R. & Travers, Tony & Whitehead, Christine M E, 2007. "The impact of recent immigration on the London economy," LSE Research Online Documents on Economics 23536, London School of Economics and Political Science, LSE Library.
    10. Ioannis Kaplanis, 2010. "Local Human Capital and Its Impact on Local Employment Chances in Britain," SERC Discussion Papers 0040, Spatial Economics Research Centre, LSE.
    11. Chris Hamnett, 1996. "Social Polarisation, Economic Restructuring and Welfare State Regimes," Urban Studies, Urban Studies Journal Limited, vol. 33(8), pages 1407-1430, October.
    12. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 145-173.
    13. 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.
    14. Alan Manning, 2004. "We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers," CEP Discussion Papers dp0640, Centre for Economic Performance, LSE.
    15. Chris Hamnett, 1994. "Social Polarisation in Global Cities: Theory and Evidence," Urban Studies, Urban Studies Journal Limited, vol. 31(3), pages 401-424, April.
    16. Tommaso Frattini, 2012. "Immigrazione," Rivista di Politica Economica, SIPI Spa, issue 3, pages 363-407, July-Sept.
    17. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
    18. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1279-1333.
    19. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    20. Alan Manning, 2004. "We Can Work It Out: The Impact of Technological Change on the Demand for Low‐Skill Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 581-608, November.
    21. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    22. Mark Pont, 2007. "Coverage and non‐response errors in the UK New Earnings Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 170(3), pages 713-733, July.
    23. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-392, June.
    24. Daniel J Graham, 2009. "Identifying urbanisation and localisation externalities in manufacturing and service industries," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 63-84, March.
    25. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Julie Fry, 2014. "Migration and Macroeconomic Performance in New Zealand: Theory and Evidence," Treasury Working Paper Series 14/10, New Zealand Treasury.
    2. Neil Lee & Paul Sissons, 2016. "Inclusive growth? The relationship between economic growth and poverty in British cities," Environment and Planning A, , vol. 48(11), pages 2317-2339, November.
    3. Kaplanis, Ioannis, 2010. "Wage effects from changes in local human capital in Britain," LSE Research Online Documents on Economics 33615, London School of Economics and Political Science, LSE Library.
    4. Kaplanis, Ioannis, 2010. "Local human capital and its impact on local employment chances in Britain," LSE Research Online Documents on Economics 33503, London School of Economics and Political Science, LSE Library.
    5. David N. F. Bell & David Eiser, 2016. "Migration and fiscal policy as factors explaining the labour-market resilience of UK regions to the Great Recession," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(1), pages 197-215.
    6. Carmelina Bevilacqua & Ilaria Giada Anversa & Gianmarco Cantafio & Pasquale Pizzimenti, 2019. "Local Clusters as “Building Blocks” for Smart Specialization Strategies: A Dynamic SWOT Analysis Application in the Case of San Diego (US)," Sustainability, MDPI, Open Access Journal, vol. 11(19), pages 1-25, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaplanis, Ioannis, 2010. "Wage effects from changes in local human capital in Britain," LSE Research Online Documents on Economics 33615, London School of Economics and Political Science, LSE Library.
    2. Martina Bisello, 2013. "Job polarization in Britain from a task-based perspective.Evidence from the UK Skills Surveys," Discussion Papers 2013/160, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    3. Gianmarco I. P. Ottaviano & Giovanni Peri & Greg C. Wright, 2021. "Immigration, Offshoring, and American Jobs," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 10, pages 291-326, World Scientific Publishing Co. Pte. Ltd..
    4. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    5. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
    6. Ortega, Javier & Verdugo, Gregory, 2015. "The impact of immigration on the local labor market outcomes of blue collar workers: panel data evidence," LSE Research Online Documents on Economics 61073, London School of Economics and Political Science, LSE Library.
    7. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    8. Michael J. Böhm, 2020. "The price of polarization: Estimating task prices under routine‐biased technical change," Quantitative Economics, Econometric Society, vol. 11(2), pages 761-799, May.
    9. Sebastian Lago Raquel & Federico Biagi, 2018. "The Routine Biased Technical Change hypothesis: a critical review," JRC Working Papers JRC113174, Joint Research Centre (Seville site).
    10. Zsófia L. Bárány & Christian Siegel, 2018. "Job Polarization and Structural Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 57-89, January.
    11. Eric D Gould, 2019. "Explaining the Unexplained: Residual Wage Inequality, Manufacturing Decline and Low-skilled Immigration," Economic Journal, Royal Economic Society, vol. 129(619), pages 1281-1326.
    12. Bárány, Zsófia L. & Siegel, Christian, 2020. "Biased technological change and employment reallocation," Labour Economics, Elsevier, vol. 67(C).
    13. Amuedo-Dorantes, Catalina & de la Rica, Sara, 2011. "Complements or substitutes? Task specialization by gender and nativity in Spain," Labour Economics, Elsevier, vol. 18(5), pages 697-707, October.
    14. Nathan, Max, 2011. "The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices," MPRA Paper 29465, University Library of Munich, Germany.
    15. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    16. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    17. Antonio Accetturo & Alberto Dalmazzo & Guido Blasio, 2014. "Skill Polarization In Local Labor Markets Under Share-Altering Technical Change," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 249-272, March.
    18. Autor, David & Dorn, David, 2009. "Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States," IZA Discussion Papers 4290, Institute of Labor Economics (IZA).
    19. Böckerman, Petri & Laaksonen, Seppo & Vainiomäki, Jari, 2013. "Is there job polarization at the firm level?," MPRA Paper 50833, University Library of Munich, Germany.
    20. Charlotte Senftleben-König & Hanna Wielandt, 2014. "The Polarization of Employment in German Local Labor Markets," Working Papers 2014007, Berlin Doctoral Program in Economics and Management Science (BDPEMS).

    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecgeog:v:90:y:2014:i:1:p:67-90. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/declaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/declaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.