Spatial Econometric Analysis of Rural Employment Change during the Recession: Full-time versus...

Spatial Econometric Analysis of Rural Employment Change during the Recession:

Full-time versus part-time

Siyi Feng and Myles Patton

EAAE 150th 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: 2007-2011 Caveats:

•Extreme observations•Adjustments in the spatial distribution of population change hindered by crash of housing market3 equation system used in this study: full-time employment, part-time employment and population

(Methodology Cont.)

(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

50 R1

R 2 R 3

R

R 5

R 6

R 7

5

15 4

10

1 5

5

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 FindingsFull-time Employment Change within Rural Wards

Preliminary FindingsFull-time Employment Change within Rural Wards

•Decline cluster at the north,

Preliminary FindingsFull-time Employment Change within Rural Wards

•Decline cluster at the north, west of Lough Neigh,

Preliminary FindingsFull-time Employment Change within Rural Wards

•Decline cluster at the north, west of Lough Neigh, south of Lough Neigh

Preliminary FindingsFull-time Employment Change within Rural Wards

Preliminary FindingsFull-time Employment Change within Rural Wards

Preliminary FindingsFull-time Employment Change within Rural Wards

Preliminary FindingsPart-time Employment Change within Rural Wards

•High growths tend to be near urban areas

Preliminary FindingsPart-time Employment Change within Rural Wards

Preliminary FindingsPart-time Employment Change within Rural Wards

Preliminary FindingsPart-time Employment Change within Rural Wards

Preliminary FindingsPart-time Employment Change within Rural Wards

Preliminary FindingsPopulation Change within Rural Wards

ConclusionsFull-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 be taken 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

ConclusionsThe 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

Thank-you