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

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  • Ian Gordon
  • Ioannis Kaplanis

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.

Suggested Citation

  • Ian Gordon & Ioannis Kaplanis, 2012. "Accounting for Big City Growth in Low Paid Occupations: Immigration and/or Service Class Consumption," SERC Discussion Papers 0106, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:sercdp:0106
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    References listed on IDEAS

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    Cited by:

    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. 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. Ioannis Kaplanis, 2010. "Local Human Capital and Its Impact on Local Employment Chances in Britain," SERC Discussion Papers 0040, Centre for Economic Performance, LSE.
    4. Julie Fry, 2014. "Migration and Macroeconomic Performance in New Zealand: Theory and Evidence," Treasury Working Paper Series 14/10, New Zealand Treasury.
    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, vol. 11(19), pages 1-25, October.

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    More about this item

    Keywords

    regional labour markets; wages; employment; international migration; consumer demand;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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