Spatial Econometric Analysis of Rural Employment Change during the Recession: Full-time versus part-time Siyi Feng and Myles Patton EAAE 150 th Seminar, 2015

Motivation Recession 2008: general decline in employment but extent varied in different areas Within employment changes in Northern Ireland Full-time employment declined in most rural wards Part-time employment declined little on average Question: what are driving the spatial variations in the employment change in rural areas?

Methodology- Growth Equilibrium Model Framework Seminal papers: Carlino and Mills (1987); Boarnet (1994) Measures linkages between employment and population change and other drivers of economic growth  Firm and Residential location choices are linked– simultaneity between employment and population change  Account for spatial spillover effects

(Methodology Cont.)  Data: wards level data focusing on rural areas  Period:  Caveats: Extreme observations Adjustments in the spatial distribution of population change hindered by crash of housing market  3 equation system used in this study: full- time employment, part-time employment and population

(Methodology Cont.)

FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas

(Methodology Cont.) FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas PT emp: population change in own and nearby areas; industry mix; qualification; part-time employment change in nearby areas

(Methodology Cont.) FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas PT emp: population change in own and nearby areas; industry mix; qualification; part-time employment change in nearby areas Population: total employment change in own and nearby areas; amenity; population change in nearby areas

(Methodology Cont.) FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas PT emp: population change in own and nearby areas; industry mix; qualification; part-time employment change in nearby areas Population: total employment change in own and nearby areas; amenity; population change in nearby areas Ward-level data -> Spatial spillover effect

(Methodology Cont.) FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas PT emp: population change in own and nearby areas; industry mix; qualification; part-time employment change in nearby areas Population: total employment change in own and nearby areas; amenity; population change in nearby areas Ward-level data -> Spatial spillover effect Endogeneity issue: follow literature to construct IV

Spatial Spillover Effects No. of commutes from R1 to other regions Weighting for R4 Distance weight matrix: 0.17 Commute weight matrix: 0.50 Autoregressive spatial lags Inverse distance weight matrix Cross-regressive spatial lags Commute weight matrix

Key Transportation Corridors NI (Source: Department of Regional Development (2001))

Preliminary Findings Full-time Employment Change within Rural Wards

Decline cluster at the north,

Preliminary Findings Full-time Employment Change within Rural Wards Decline cluster at the north, west of Lough Neigh,

Preliminary Findings Full-time Employment Change within Rural Wards Decline cluster at the north, west of Lough Neigh, south of Lough Neigh

Preliminary Findings Full-time Employment Change within Rural Wards

Preliminary Findings Part-time Employment Change within Rural Wards High growths tend to be near urban areas

Preliminary Findings Part-time Employment Change within Rural Wards

Preliminary Findings Population Change within Rural Wards

Conclusions Full-time and part-time employment changes are driven by different explanatory factors -FT: better skill mix, better resilience; industry mix also plays a role -PT: tends to follow population growth -Policy implication: 1.These subtleties need to betaken into consideration in rural development strategies, particularly investment in education, job creation etc. 2.Rural development should take into account impacts on a wider area

Conclusions The role of urban areas -Previous study using data suggests employment growth in urban areas drive both employment and population to grow in rural areas -In this study: negative impact on part-time employment but still positive in population -Policy implication: urban-rural linkage is an important component in rural development

Thank-you