The Resistance of Dutch Regions to Economic Shocks
The Resistance of Dutch Regions to Economic Shocks
The Resistance of Dutch Regions to Economic Shocks
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
<strong>The</strong> resilience <strong>of</strong><br />
<strong>Dutch</strong> regions for<br />
economic shocks<br />
Anet Weterings<br />
Dario Dioda<strong>to</strong><br />
Martijn van den Berge en<br />
Ot<strong>to</strong> Raspe<br />
Ruimteconferentie 2013
Background: closing down <strong>of</strong> large companies<br />
• Should the government invest <strong>to</strong> limit the effect <strong>of</strong> structural<br />
and regional changes in employment?
Aim <strong>of</strong> the study<br />
• Provide insights in the resilience <strong>of</strong> <strong>Dutch</strong> regions for<br />
(potential) economic shocks<br />
– E.g., recession, closuring down large companies, structural<br />
change in regional employement<br />
• Insights in regional resilience prior <strong>to</strong> the shock<br />
– Policy intervention <strong>to</strong> limit effect shock still an option<br />
• Focus on resilience <strong>of</strong> the regional labour market<br />
– Where would shocks lead <strong>to</strong> an increase in structural<br />
unemployment?<br />
– Using empirical data on jobs and labor flows between industries<br />
and regions
Resilience – ability <strong>to</strong> recover<br />
• Impact shock: jobs disappear, people become unemployed<br />
• Recovery <strong>of</strong> the regional labour market:<br />
– What are the opportunities <strong>of</strong> laid-<strong>of</strong>f employees <strong>to</strong> find a new job<br />
without moving <strong>to</strong> another region?<br />
› Limited <strong>to</strong> newly unemployed, not structural unemployed<br />
• Differences between regions in ability <strong>to</strong> recover depends on:<br />
– Intersec<strong>to</strong>ral labour mobility (skill-relatedness)<br />
– Interregional labour mobility (connectivity)
Resilience – ability <strong>to</strong> recover<br />
• Intersec<strong>to</strong>ral labour mobility<br />
– Newly unemployed can find a new job in the same sec<strong>to</strong>r or in<br />
other sec<strong>to</strong>rs<br />
› Possibilities own sec<strong>to</strong>r limited due <strong>to</strong> shock<br />
– Other sec<strong>to</strong>rs only option when skills built up during the previous<br />
job also applicable in other sec<strong>to</strong>r<br />
› Skill-relatedness
Labor flows between sec<strong>to</strong>rs<br />
Skill-relatedness<br />
Manufacturing<br />
Construction and utilities<br />
Logistics<br />
Business services<br />
Consumer services<br />
Government and non-pr<strong>of</strong>it<br />
Source: CBS 2001-2004
Labor flows between sec<strong>to</strong>rs<br />
Skill-relatedness<br />
Manufacturing<br />
Construction and utilities<br />
Logistics<br />
Business services<br />
Consumer services<br />
Government and non-pr<strong>of</strong>it<br />
Source: CBS 2001-2004
Resilience – ability <strong>to</strong> recover<br />
• Intersec<strong>to</strong>ral labour mobility<br />
– Newly unemployed can find a new job in the same sec<strong>to</strong>r or in<br />
other sec<strong>to</strong>rs<br />
› Possibilities own sec<strong>to</strong>r limited due <strong>to</strong> shock<br />
– Other sec<strong>to</strong>rs only option when skills built up during the previous<br />
job also applicable in other sec<strong>to</strong>r<br />
› Skill-relatedness<br />
• <strong>Regions</strong> recover more quickly when sec<strong>to</strong>ral portfolio is<br />
characterised by related industries
Skill-relatedness – Greater Amsterdam<br />
Manufacturing<br />
Construction and utilities<br />
Logistics<br />
Business services<br />
Consumer services<br />
Government and non-pr<strong>of</strong>it<br />
Source: CBS 2001-2004
Skill-relatedness – Greater Rijnmond<br />
Manufacturing<br />
Construction and utilities<br />
Logistics<br />
Business services<br />
Consumer services<br />
Government and non-pr<strong>of</strong>it<br />
Source: CBS 2001-2004
Resilience – ability <strong>to</strong> recover<br />
• Interregional labour mobility<br />
– When few new jobs are available in the own region, unemployed<br />
can search for a job in neighbouring regions<br />
› Only regions within commuting distance<br />
› Limited willingness/possibilities for moving<br />
– Higher commuting costs, but better option than unemployment or<br />
moving <strong>to</strong> another region<br />
• <strong>Regions</strong> recover more quickly when they have a central<br />
location or provide good connections <strong>to</strong> other regions
Labor flows<br />
between regions<br />
- travel costs<br />
Source: Sociaal-statistisch bestand 2008
Resilience – ability <strong>to</strong> recover<br />
• <strong>The</strong> resilience <strong>of</strong> a region depends on:<br />
1. <strong>The</strong> sec<strong>to</strong>ral portfolio <strong>of</strong> the region<br />
– <strong>The</strong> more sec<strong>to</strong>rs require the same skills, the more job<br />
opportunities for laid-<strong>of</strong>f employees<br />
2. <strong>The</strong> connectivity <strong>of</strong> the region<br />
– <strong>The</strong> lower the travel costs from a municipality <strong>to</strong> other<br />
municipalities, the more job opportunities for laid-<strong>of</strong>f employees<br />
3. Borrowed size: sec<strong>to</strong>ral portfolio <strong>of</strong> neighbouring regions<br />
– Are there jobs available in sec<strong>to</strong>rs that (partly) rely on the same<br />
skills?
Data for measuring resilience<br />
• Starting point is number <strong>of</strong> jobs per industry and region:<br />
• 437 industries (4-digit NACE codes Rev. 1.1)<br />
• 443 <strong>Dutch</strong> regions (municipality level)<br />
• 52 + 24 border regions in Germany and Belgium: NUTS III<br />
(Institut fur Arbeitsmarkt- und Berufsforschung & Bureau van<br />
Dijk)<br />
• Simulated a shock <strong>of</strong> 10% in all regions and industries<br />
• Calculated resilience <strong>to</strong> that shock<br />
• Indicates how quickly a newly unemployed is likely <strong>to</strong> find a new<br />
job considering all job opportunities
Regional<br />
differences<br />
in resilience<br />
Shock:<br />
10% <strong>of</strong> all jobs in the<br />
Netherlands disappear
Differences between industries (10% shock)<br />
Logistics<br />
Financial services
Conclusions<br />
• <strong>The</strong> likelihood <strong>of</strong> an increase in structural unemployment due<br />
<strong>to</strong> a shock depends on:<br />
1. Relatedness <strong>of</strong> industries in region<br />
› Disadvantage is sec<strong>to</strong>ral structure with isolated industries, e.g., Velsen<br />
(Tata steel), Sittard-Geleen (NedCar)<br />
› Advantage is sec<strong>to</strong>ral structure with related industries, e.g., Eindhoven<br />
(high tech manufacturing) and Amsterdam (financial services)<br />
2. Lack <strong>of</strong> relatedness in own region can be compensated by good<br />
connectivity <strong>to</strong> regions with related activities<br />
• Implications for policymakers:<br />
– Relatedness and connectivity provide detailed information in<br />
strength and weaknesses <strong>of</strong> the regional-sec<strong>to</strong>ral structure<br />
› Affects resilience <strong>of</strong> the region
Policy discussion<br />
• How can regions improve their resilience?<br />
1. Increase possibilities for commuting:<br />
• Investments in infrastructure<br />
• Improve possibilities for cross-border employment (Limburg)<br />
2. Strengthen regional sec<strong>to</strong>ral portfolio:<br />
• Build on existing sec<strong>to</strong>ral specialisation, because for those the<br />
necessary skills are (partly) present in the region<br />
• Guidance <strong>of</strong> unemployed <strong>to</strong> a new job through schooling<br />
• Stimulating entrepreneurship in growing sec<strong>to</strong>rs<br />
• Relatedness network <strong>of</strong>fers opportunity <strong>to</strong> identify relevant<br />
sec<strong>to</strong>rs
Background: job growth by industry<br />
Source: CBS 1999-2010<br />
1999 = 100
Shock in region A,<br />
sec<strong>to</strong>r 1<br />
Region A<br />
Sec<strong>to</strong>r 1<br />
Sec<strong>to</strong>r 2<br />
Region B<br />
Sec<strong>to</strong>r 1<br />
Resilience<br />
Sec<strong>to</strong>r 3 Sec<strong>to</strong>r 2<br />
Region A<br />
Sec<strong>to</strong>r 1<br />
Region B<br />
Sec<strong>to</strong>r 1<br />
Shock in region B,<br />
sec<strong>to</strong>r 2<br />
Resilience<br />
Sec<strong>to</strong>r 2<br />
Sec<strong>to</strong>r 3<br />
Sec<strong>to</strong>r 2
Change language