The geography of job creation and destruction in UK services, 19982001

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The geography of job creation and destruction in
UK services, 1998-2001

• Jürgen Essletzbichler
• Department of Geography
• University College London

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Overview

• Introduction
• Method and Data
• Empirical results
• Comparisons with manufacturing
• Regional differences
• Conclusion

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Introduction

• Most work on gross employment flows for
• Manufacturing
• National level
• Limited policy impact
• If fundamentally different from services
• If significantly different across regions

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Research questions

• How do job creation and destruction processes
  differ between manufacturing and services?
• Are there regional differences in job creation
  and destruction processes in services?
• Quantity
• Quality (high-wage jobs, persistence,
  ownership)

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Data

• Annual Respondents Dataset
• Manufacturing (since 1970)
• Services (since 1998)
• But no financial services, public sector health
  care,..
• Structure
• Enterprise groups (EGR)
• Reporting units (RU)
• Local units (LU)
• About 1.68 million LUs in services in 2001
• About 16.1 million services sector jobs
• Geography 110 Postcode Areas

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METHOD

• NETR JCR JDR
• JCR ENTRY RATE INCUMBENT GROWTH RATE
• ENTRY RATE FIRM ENTRY RATE PLANT OPENING RATE
• JDR EXIT RATE INCUMBENT DECLINE RATE
• EXIT RATE FIRM EXIT RATE PLANT CLOSURE RATE

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Rates of employment change, manufacturing and
services ,1998-2001
Source ARD, ONS.
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Persistence Rates, for 1999 entrants
Source ARD, ONS.
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Correlation Service employment share 1998 with
components of employment change, 1998-2001 average
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Correlation between NETR and components of
change, 1998-2001
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Summary I

• High turnover in manufacturing and services but,
• Higher in services
• Plant opening most important in services
• Incumbent growth most important in manufacturing

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Summary II

• Opening of plants more important in peripheral
  regions (convergence)
• Firm entry and incumbent growth higher in core
  areas (London and Southeast) (divergence)
• High rates of NETR in periphery, but poor
  quality

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Conclusion

• Entry and exit process appears more important for
  employment growth/decline in services
• Attraction of low-wage jobs in Scotland, North
  England and Wales rather problematic
• High-wage job creation in London and Southeast
  will exacerbate structural inequalities