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The Political Economy of Full Employment in Modern Britain

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  • Robert Rowthorn

Abstract

This paper examines the regional aspects of structural change and unemployment in the UK. Manufacturing decline has severely hit the industrial conurbations of the North. Although reflecting long-run trends, this decline has been exacerbated by poor macroeconomic management. New service jobs have been created but most of these are in the South. This growing North-South divide is reflected in a southward drift of population. The extent of the northern decline is masked by government expenditures that help to maintain employment in depressed areas. But this is only a temporary solution. As population drifts away from the depressed areas, public expenditures will eventually be cut, causing further loss of employment and population in these areas. Using a simple export base model, the paper quantifies the underlying decline of the northern economy. In relative terms, this decline has been almost as fast in the 1990s as in the previous decade of industrial crisis.

Suggested Citation

  • Robert Rowthorn, 2000. "The Political Economy of Full Employment in Modern Britain," Working Papers wp164, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp164 Note: PRO-1
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    File URL: https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp164.pdf
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    References listed on IDEAS

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    1. P.N. O'Farrell & D.M. Hitchens & L.A.R. Moffat, 1993. "The Competitiveness of Business Services and Regional Development: Evidence from Scotland and the South East of England," Urban Studies, Urban Studies Journal Limited, pages 1629-1652.
    2. P A Wood & J Bryson & D Keeble, 1993. "Regional Patterns of Small Firm Development in the Business Services: Evidence from the United Kingdom," Environment and Planning A, , pages 677-700.
    3. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, pages 1120-1171.
    4. Vivarelli, Marco & Evangelista, Rinaldo & Pianta, Mario, 1996. "Innovation and employment in Italian manufacturing industry," Research Policy, Elsevier, pages 1013-1026.
    5. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, pages 977-1009.
    6. P A Wood & J Bryson & D Keeble, 1993. "Regional patterns of small firm development in the business services: evidence from the United Kingdom," Environment and Planning A, Pion Ltd, London, vol. 25(5), pages 677-700, May.
    7. Suma Athreye & David Keeble, 2001. "Specialised Markets and the Behaviour of Firms: Evidence from the UK's Regional Economies," Open Discussion Papers in Economics 33, The Open University, Faculty of Social Sciences, Department of Economics.
    8. Bryson, John R & Keeble, David & Wood, Peter, 1997. "The Creation and Growth of Small Business Service Firms in Post-industrial Britain," Small Business Economics, Springer, pages 345-360.
    9. Suma Athreye, 1997. "On Markets in Knowledge," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 1(2), pages 231-253, June.
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    Cited by:

    1. Hans-Martin Krolzig & Juan Toro, 2004. "Classical and modern business cycle measurement: The European case," Spanish Economic Review, Springer;Spanish Economic Association, vol. 7(1), pages 1-21, January.
    2. Hans-Martin Krolzig & Juan Toro, 2004. "Classical and modern business cycle measurement: The European case," Spanish Economic Review, Springer;Spanish Economic Association, vol. 7(1), pages 1-21, January.
    3. R J R Elliott & J Lindley, 2003. "Trade, Skills and Adjustment Costs: A Study of Intra-Sectoral Labour Mobility in the UK," The School of Economics Discussion Paper Series 0312, Economics, The University of Manchester.
    4. Gavin Cameron & John Muellbauer & Jonathan Snicker, 2002. "A Study in Structural Change: Relative Earnings in Wales Since the 1970s," Regional Studies, Taylor & Francis Journals, pages 1-11.

    More about this item

    Keywords

    Unemployment; Structural Change; Migration; Regions;

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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