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Relocation of Public Sector Workers: Evaluating a Place-based Policy

  • Giulia Faggio

This paper assesses the local labour market impact of a UK public sector relocation initiative labeled the Lyons Review. The review resulted in the dispersal of more than 25,000 civil servants out of London and the South East towards other UK destinations. The objective of the paper is to detect whether inflows of public sector jobs have crowded out private sector activity or stimulated the local provision of additional jobs in the private sector. By applying a difference-in-difference approach, I evaluate the policy impact comparing areas in close proximity to a relocation site with areas further away. I find that the dispersal of public sector workers that followed the implementation of the Lyons Review had a positive impact on local services with a negative, but weaker, impact on manufacturing.

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Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0155.

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Date of creation: Feb 2014
Date of revision:
Handle: RePEc:cep:sercdp:0155
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  1. B Ashcroft & J K Swales, 1982. "The importance of the first round in the multiplier process: the impact of Civil Service dispersal," Environment and Planning A, Pion Ltd, London, vol. 14(4), pages 429-444, April.
  2. J. N. Marshall & D. Bradley & C. Hodgson & N. Alderman & R. Richardson, 2005. "Relocation, relocation, relocation: Assessing the case for public sector dispersal," Regional Studies, Taylor & Francis Journals, vol. 39(6), pages 767-787.
  3. B Ashcroft & J K Swales, 1982. "The Importance of the First round in the Multiplier Process: The Impact of Civil Service Dispersal," Environment and Planning A, , vol. 14(4), pages 429-444, April.
  4. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2004. "University Decentralization as Regional Policy: The Swedish Experiment," Berkeley Program on Housing and Urban Policy, Working Paper Series qt81n6b8fb, Berkeley Program on Housing and Urban Policy.
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  8. Laurent Gobillon & Thierry Magnac & Harris Selod, 2010. "Do Unemployed Workers Benefit from Enterprise Zones ? The French Experience," Working Papers 2010-45, Centre de Recherche en Economie et Statistique.
  9. David Neumark & Jed Kolko, 2008. "Do Enterprise Zones Create Jobs? Evidence from California's Enterprise Zone Program," NBER Working Papers 14530, National Bureau of Economic Research, Inc.
  10. Cheshire, Paul & Hilber, Christian A. L., 2007. "Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge," MPRA Paper 5435, University Library of Munich, Germany.
  11. Rosenthal, Stuart S. & Strange, William C., 2008. "The attenuation of human capital spillovers," Journal of Urban Economics, Elsevier, vol. 64(2), pages 373-389, September.
  12. Matias Busso & Jesse Gregory & Patrick Kline, 2011. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," Working Papers 11-07, Center for Economic Studies, U.S. Census Bureau.
  13. Enrico Moretti, 2010. "Local Multipliers," American Economic Review, American Economic Association, vol. 100(2), pages 373-77, May.
  14. Cheshire, Paul & Sheppard, Stephen, 2002. "The welfare economics of land use planning," Journal of Urban Economics, Elsevier, vol. 52(2), pages 242-269, September.
  15. Sascha Becker & Stephan Heblich & Daniel Sturm, 2013. "The Impact of Public Employment: Evidence from Bonn," ERSA conference papers ersa13p731, European Regional Science Association.
  16. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  17. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2009. "Urbanization, Productivity and Innovation: Evidence from Investment in Higher Education," Berkeley Program on Housing and Urban Policy, Working Paper Series qt9b4885mq, Berkeley Program on Housing and Urban Policy.
  18. Mayer, Thierry & Mayneris, Florian & Py, Loriane, 2012. "The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs," CEPR Discussion Papers 9074, C.E.P.R. Discussion Papers.
  19. Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
  20. Freedman, Matthew, 2012. "Teaching new markets old tricks: The effects of subsidized investment on low-income neighborhoods," Journal of Public Economics, Elsevier, vol. 96(11), pages 1000-1014.
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  26. Henry Overman & Elias Einio, 2012. "The Effects of Spatially Targeted Enterprise Initiatives: Evidence from UK LEGI," ERSA conference papers ersa12p164, European Regional Science Association.
  27. repec:cup:cbooks:9780521739023 is not listed on IDEAS
  28. DiNardo, John & Lee, David S., 2011. "Program Evaluation and Research Designs," Handbook of Labor Economics, Elsevier.
  29. Jed Kolko & David Neumark, 2010. "Do some enterprise zones create jobs?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 5-38.
  30. Ashcroft, Brian & Swales, J. K., 1982. "Estimating the effects of government office dispersal : An application of demand constrained shadow wages," Regional Science and Urban Economics, Elsevier, vol. 12(1), pages 81-97, February.
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