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Accounting for big-city growth in low-paid occupations: immigration and/or service-class consumption

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  • Gordon, Ian R.
  • Kaplanis, Ioannis

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.

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  • Gordon, Ian R. & Kaplanis, Ioannis, 2014. "Accounting for big-city growth in low-paid occupations: immigration and/or service-class consumption," LSE Research Online Documents on Economics 55716, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:55716
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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. Ioannis Kaplanis, 2010. "Local Human Capital and Its Impact on Local Employment Chances in Britain," SERC Discussion Papers 0040, Spatial Economics Research Centre, LSE.
    3. Julie Fry, 2014. "Migration and Macroeconomic Performance in New Zealand: Theory and Evidence," Treasury Working Paper Series 14/10, New Zealand Treasury.
    4. 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.
    5. 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.
    6. 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.

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    More about this item

    Keywords

    polarization; global cities thesis; migrant labor; labor markets; London; wages; untraded services;
    All these keywords.

    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

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