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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
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Handle: RePEc:cep:sercdp:0155
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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  1. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2009. "Urbanization, productivity, and innovation: Evidence from investment in higher education," Journal of Urban Economics, Elsevier, vol. 66(1), pages 2-15, July.
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  9. Wouter Vermeulen & Christian A.L. Hilber, 2012. "The Impact of Supply Constraints on House Prices in England," CPB Discussion Paper 219, CPB Netherlands Bureau for Economic Policy Analysis.
  10. Giulia Faggio & Henry G. Overman, 2012. "The Effect of Public Sector Employment on Local Labour Markets," SERC Discussion Papers 0111, Spatial Economics Research Centre, LSE.
  11. Matias Busso & Patrick Kline, 2008. "Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program," Cowles Foundation Discussion Papers 1639, Cowles Foundation for Research in Economics, Yale University.
  12. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
  13. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
  14. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  15. 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.
  16. Sascha Becker & Stephan Heblich & Daniel Sturm, 2013. "The Impact of Public Employment: Evidence from Bonn," ERSA conference papers ersa13p731, European Regional Science Association.
  17. 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.
  18. 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.
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