Recessionary shocks and regional employment: Evidence on the resilience of UK regions

Bernard Fingleton*, Harry Garretsen, Ron Martin

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

193 Citations (Scopus)


We analyze the resilience of U.K. regions to employment shocks. Two basic notions of resilience are distinguished. With engineering resilience, there is an underlying stable growth path to which a regional economy rebounds following a shock. With ecological resilience, shocks can permanently affect the growth path of the regional economy. Our data set consists of quarterly employment series for 12 U.K. regions (NUTS I) for the period 19712010. Using a seemingly unrelated regression (SUR) model specification, we test for the relevance of (engineering) resilience of U.K. regional employment to the four recessionary shocks in our sample. It turns out that U.K. regions do indeed differ in their resilience, but that these differences mainly concern the initial resistance to these shocks and not so much the recovery stage. The SUR model does not allow shocks to have permanent effects and it also does not take the possibility of time differentiated shock spillovers between the 12 regions into account. To this end, we also estimate a vector error-correction model (VECM) specification where employment shocks can have permanent effects and where also interregional employment linkages are included. We find that employment shocks typically have permanent effects when it concerns the own-region effects. Permanent effects can also be found for the impact on other regions but the interregional effects are typically only significant for nearby regions.

Original languageEnglish
Pages (from-to)109-133
Number of pages25
JournalJournal of Regional Science
Issue number1
Publication statusPublished - Feb-2012



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