Archive for January, 2011

How did London get away with it?

January 21, 2011

A lot of people predicted London would be hit hard during the recession. In fact, London did better than the rest of the UK. Why?

Henry Overman, Director of SERC, delivered the answer at the first LSE Works lecture last night (with some help from me on numbers, trends and jokes). In case you couldn’t make it, here’s a post on LSE’s Public Policy blog which gives the main story.

LSE should be putting up a podcast in the next couple of weeks. Watch out for that here. Meanwhile, the next event in the series is CEP Director John Van Reenen, on ‘Where is Future Growth Going to Come From?’ That’s on 17 February.

In March we have both Lord Stern (on the low carbon economy) and Bruce Katz from Brookings Metro Program (on the ‘next urban economy’, some joint work with me and colleagues at LSE Cities).

Is migration good for British cities?

January 16, 2011

The LSE Migration Studies Unit have published a new paper of mine, looking at the long term economic effects of migration in British cities.

In a nutshell, I find migration is good for productivity and wages, less good for low skill workers’ employment. Let’s explain why …

The paper takes stock of the UK’s last big ‘migration cycle’ – from the mid-1990s to 2008. During this time net migration spiked up from 30-40,000 people per year to around 198,000 by 2007 . Most of those people ended up in urban areas, although some rural areas saw rapid growth too.

We’d expect this kind of shift to change both the size and the composition of cities’ population and workforce. We’d also expect a mix of short term ‘shocks’ to labour supply, and more subtle changes to urban economic structure.

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Sure enough, I find:

1)     Net migration to UK cities helps raise the productivity and wages of British-born workers, especially the higher skilled

2)     Net migration is linked to lower employment rates, especially among lower skilled UK-born workers.

I think I can interpret these as causal effects. (For the econometricians, results survive a battery of robustness checks, including a shift-share IV specification.)

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For policymakers, there are two big stories here.

The good news is that the diversity migrants bring is good for UK productivity, and helps raise average incomes. A number of things are probably driving this – high skilled migrants, diversity-innovation effects, and the benefits of diasporic communities in trade links.

The bad news isn’t about migrants taking British jobs – that’s too simplistic. My research and other evidence suggest various things are happening here. It’s partly about deindustrialisation. Established migrant communities went where the jobs were in the 1960s and 70s, and have stayed in old industrial towns as jobs have gone. And it’s partly about employer behaviour – during the 1990s the UK has seen increasing numbers of low-quality entry-level jobs, plus increasing use of employment agencies, many of whom use largely migrant labour. As a result, low-skilled Britons face a combination of poor jobs, limited access and competition. In effect, the labour market locks them out.

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Like a number of others, I think migration is good for UK plc, and good for British cities. Policy should be encouraging high-skill migrants in – through universities and workplace channels. At the same time, we need tougher regulation of poor employers and employment agencies, as well as restrictions on lower-skilled workers.

That needs a more sophisticated system than a migration cap – although the Coalition’s latest proposals suggest they are trying to introduce some flexibilities into what most businesses and experts think is a basically flawed idea.

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Now, these findings are significantly different from most (but not all) research in this field. It’s worth explaining why, and why I think this paper adds value.

First, I’m looking at the long term – I have a 16-year panel, rather longer than most other studies in the field.

Second, I’m looking beyond the labour market – I’m able to identify some short term wage and job ‘shocks’, but I’m also able to look at dynamic effects on urban economies, such as productivity and cost of living effects.

Third, I pay careful attention to space – most research on the local effects of migration compares outcomes across regions or local authority districts, which are either too big or too small to represent functioning economic zones. By building a new dataset of real urban economies, I’m able to pick up effects other studies might have missed.

This is work in progress. So as ever, I’d welcome your comments.

Lie down and be counted

January 10, 2011

A new year’s present for you all. I’ve got a new (old) mix out on the Broken20 label, a spin-off from the all-conquering Numbers empire. The mix is part of Broken20’s series of podcasts (here’s the iTunes feed) which is well worth signing up to.

Click here to download the mix. Blurb and tracklisting below.

Thanks again to Broken20 and to Rauridh for putting this out.

Happy listening!

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I put this mix together in summer 2005. It was originally designed for playing on Sunday afternoons at the Foundry, East London, where slow sound system ran sporadic listening sessions from 2003 to 2009.

I took a fairly loose-limbed approach in assembling the thing. There’s a lot of the new weird america and free-folk / psyche stuff my friends and I were listening to at the time, alongside some field recordings, lo-fi stuff, electronics, outish rock, John Fahey and Can. Heroically, I included pretty much the full 18 minutes of ‘Augmn’ which seemed like a good idea at the time. You’ll have to judge for yourselves.

The mix was recorded on three portable cd players to minidisc. One take, no edits or post-production.

http://www.slowsoundsystem.net

Chris Watson – The Crossroads (Touch)
Growing – Primitive Associations / Great Mass Above (Kranky)
Rafael Toral – We Are Getting Closer (Touch)
Masaki Batoh – Benthos (Drag City)
Janek Schaeffer – Love Song (Room40)
Black Dice – Skeleton (Fat Cat)
Can – Augmn (Spoon / Mute)
Kammerflimmer Kollektief – Unstet (für Jeffrey Lee Pierce) (Staubgold)
Beta Band – The Monolith (Regal Recording)
Jackie-O-Motherfucker – Lost Stone (ATP / Ecstatic Peace)
John Fahey – Untitled With Rain (Revenant)
Saya, Takashi Ueno, Koji Shibuya & John Chantler – Mizumitaida (Fat Cat demo)
Motion – Dispersal Patterns (Motion)
Motion – Outlev (Motion)
So – j (Thrill Jockey)
Chris Watson – The Crossroads (reprise) (Touch)

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