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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
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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?
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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
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(Methodology Cont.) Data: wards level data focusing on rural areas Period: 2007-2011 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
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(Methodology Cont.)
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FT emp: population change in own and nearby areas; industry mix; qualification; full-time employment change in nearby areas
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(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
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(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
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(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
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(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
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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
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Key Transportation Corridors NI (Source: Department of Regional Development (2001))
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Preliminary Findings Full-time Employment Change within Rural Wards
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Decline cluster at the north,
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Preliminary Findings Full-time Employment Change within Rural Wards Decline cluster at the north, west of Lough Neigh,
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Preliminary Findings Full-time Employment Change within Rural Wards Decline cluster at the north, west of Lough Neigh, south of Lough Neigh
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Preliminary Findings Full-time Employment Change within Rural Wards
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Preliminary Findings Part-time Employment Change within Rural Wards High growths tend to be near urban areas
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Preliminary Findings Part-time Employment Change within Rural Wards
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Preliminary Findings Population Change within Rural Wards
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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
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Conclusions The role of urban areas -Previous study using 2001-2007 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
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Thank-you
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