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Measuring industrial restructuring pressure in regions: An employment-based index

Author

Listed:
  • Rudiger Ahrend
  • Laurenz Baertsch
  • Giuseppe Cappellari
  • Carlo Menon
  • Wessel Vermeulen
  • Zuzana Zavarska

Abstract

Industrial restructuring is a place-based process, shaped by the geographic concentration of sectors. As a result, sector-specific shocks lead to uneven regional impacts, with some areas experiencing large job losses. Place-specific shocks, such as mass layoffs, add to the uneven geography of industrial restructuring. No single indicator has yet captured the full scope of industrial restructuring pressure (IRP) across places, time periods and types of shock. This paper fills this gap by introducing a new IRP index that aggregates employment outflows across declining sectors and puts additional weight on sectorally concentrated outflows. Its main objective is to map diverse socio-economic adjustment pathways followed by places exposed to IRP. The paper illustrates the properties of the index and provides an example of its empirical application on Functional Urban Areas (FUAs) in six OECD countries (Finland, France, Spain, Sweden, United Kingdom, and United States).

Suggested Citation

  • Rudiger Ahrend & Laurenz Baertsch & Giuseppe Cappellari & Carlo Menon & Wessel Vermeulen & Zuzana Zavarska, 2026. "Measuring industrial restructuring pressure in regions: An employment-based index," OECD Local Economic and Employment Development (LEED) Papers 2026/01, OECD Publishing.
    • Handle: RePEc:oec:cfeaaa:2026/01-en
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    Keywords

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    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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