"LEVELLING UP" LABOUR SUPPLY
Lead Research Organisation:
University of Birmingham
Department Name: Strategy and International Business
Abstract
The Coronavirus pandemic has led to increases in retirement and long-term sickness, and Brexit and the pandemic together have led to a reduction in the number of EU workers in the UK. Together, these changes amount to a large reduction in the size of the workforce, which is the primary reason for difficulties faced by employers in most sectors recruiting staff since the ending of 'lockdown', as well as issue of pay and conditions and their geographical and social inequalities.
Little is known about the uneven geography across the UK in these sources of reductions in the workforce in driving the sharpest rises in job vacancies in rural areas and some London boroughs, precisely the areas most dependent on foreign labour. This information is important in designing policies to effectively address "Levelling Up" the economic fortunes of different parts of the UK, with some places short of workers, at least in the short term; and others short of jobs, in particular well-paid jobs.
The UK Government has promised a transformation to a high-wage economy following Brexit, predicated on the view that reduced labour supply will stimulate investment and innovation to raise productivity, and that the UK has become locked-in to a low-cost economic model dependent on cheap international labour. The research will produce new datasets as the latest evidence becomes available, including the 2021 Census of Population, analysis and insights to assess this claim and its geography, by examining links between local changes to local labour demand, supply, wages, productivity and unemployment.
More generally, the research will better understand the impact of Brexit and the pandemic on local labour markets and local economies in different parts of the UK, to inform planning for future economic resilience to 'shocks', and to assess the effectiveness of the UK new immigration policy in meeting labour demand and skills shortages in all parts of the UK.
Little is known about the uneven geography across the UK in these sources of reductions in the workforce in driving the sharpest rises in job vacancies in rural areas and some London boroughs, precisely the areas most dependent on foreign labour. This information is important in designing policies to effectively address "Levelling Up" the economic fortunes of different parts of the UK, with some places short of workers, at least in the short term; and others short of jobs, in particular well-paid jobs.
The UK Government has promised a transformation to a high-wage economy following Brexit, predicated on the view that reduced labour supply will stimulate investment and innovation to raise productivity, and that the UK has become locked-in to a low-cost economic model dependent on cheap international labour. The research will produce new datasets as the latest evidence becomes available, including the 2021 Census of Population, analysis and insights to assess this claim and its geography, by examining links between local changes to local labour demand, supply, wages, productivity and unemployment.
More generally, the research will better understand the impact of Brexit and the pandemic on local labour markets and local economies in different parts of the UK, to inform planning for future economic resilience to 'shocks', and to assess the effectiveness of the UK new immigration policy in meeting labour demand and skills shortages in all parts of the UK.
People |
ORCID iD |
| Donald Houston (Principal Investigator / Fellow) |
Publications
Ayoubkhani D
(2024)
Employment outcomes of people with Long Covid symptoms: community-based cohort study.
in European journal of public health
Reuschke D
(2024)
Impacts of Long COVID on workers: A longitudinal study of employment exit, work hours and mental health in the UK.
in PloS one
UK In A Changing Europe
(2024)
The State of the UK Economy
Related Projects
| Project Reference | Relationship | Related To | Start | End | Award Value |
|---|---|---|---|---|---|
| ES/X005828/1 | 01/12/2022 | 30/03/2023 | £388,511 | ||
| ES/X005828/2 | Transfer | ES/X005828/1 | 31/03/2023 | 30/05/2025 | £381,462 |
| Description | Geographical distribution of EU workers across the UK is very uneven, and some rural areas have experienced the greatest proportionate reductions in numbers of EU workers since Brexit. The rise in health problems among the UK working-age population (age 16-64) since the COVID-19 pandemic has been geographically uneven, being greatest in some rural areas and some deprived urban areas. The rise in economic inactivity (those not employed and not seeking and/or available for work) since 2020 across UK local labour markets has been driven mainly by rising health problems and not by reductions in EU workers, although some remoter rural areas with large agricultural and/or tourist sectors have been affected by labour shortages linked to Brexit. In most local labour markets, changes to economic inactivity rates have not had substantial short-term impacts on employment growth or productivity, although the long-term impacts remain uncertain until more recent local labour market data become available. The UK, Italy, Greece, Romania, southern parts of Spain and Portugal and northern parts of Scandinavia have experienced the greatest increases in economic inactivity since the COVID-19 pandemic. Economic fragility, rurality and geographical remoteness are associated with the greatest rises in economic inactivity across the regions of Europe. |
| Exploitation Route | The findings point to a need to address health problems in a geographically-targeted way in order to tackle the UK's economic inactivity problem that has emerged since the COVID-19 pandemic. The evidence provides information on local labour markets most affected by changes to the number of migrant workers since the introduction of the UK's post-Brexit immigration system. This information can inform decisions on the need to expand shortage occupation lists and/or alter earnings thresholds in the new immigration system. The Open Access dataset produced of changes to economic inactivity, health conditions, work-limiting health conditions and EU and non-EU populations in NUTS3 Regions of the UK 2018-2021 allows interest groups, members of the public, local MPS and local policy makers to access data for their local area that are not in publicly available published data. |
| Sectors | Agriculture Food and Drink Leisure Activities including Sports Recreation and Tourism Government Democracy and Justice |
| Description | Increased investment in mental health services |
| Geographic Reach | National |
| Policy Influence Type | Participation in a guidance/advisory committee |
| Impact | An email sent by an official at HM Treasury to Donald Houston on 24th November 2023 states: "You may have noticed that at Autumn Statement we announced "Between 2019 and 2023, the number of people inactive because of long-term sickness who reported a mental health condition rose by over 35%. To counter this trend, the government is committing £795 million over the next five years to tackle the root causes of mental health problems and support people to remain in or return to work, providing support for an additional half a million people over five years." "I wanted to pass on that your work* on the role mental health played in the rise in inactivity was really important in shaping our thinking and decision to target mental health. Keep up the great work!" * the word "work" was hyperlinked to an ONS article lead-authored by Prof Houston: https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/articles/healthdemographicandlabourmarketinfluencesoneconomicinactivityuk2019to2022/2023-05-19] |
| URL | https://www.gov.uk/government/publications/autumn-statement-2023/autumn-statement-2023-html#cutting-... |
| Title | Economic Inactivity, Health Conditions, Work-Limiting Health Conditions and EU and Non-EU Populations in NUTS3 Regions of the UK, 2018-2021 |
| Description | This dataset provides counts of persons in the United Kingdom for 2018 and 2021 aged 16-64 years in the following categories: i) economically inactive (currently not working and either not searching or not available for work); ii) have a long-term health condition; iii) have a long-term health condition that limits the kind or amount of work they can do; iv) were born in the EU (excluding Ireland); and v) were born outside the EU. These categories are pertinent in understanding the impact of Brexit and the COVID-19 pandemic on economic inactivity and labour shortages, which rose sharply over the period covered by the dataset. The dataset is novel because it provides a geographical disaggregation for 179 NUTS3 regions across the UK. The dataset allows the geographically uneven impacts of Brexit and the COVID-19 pandemic on local labour markets to be investigated. |
| Type Of Material | Database/Collection of data |
| Year Produced | 2024 |
| Provided To Others? | Yes |
| Impact | 63 downloads and 145 views, as at 12-03-2025. |
| URL | https://reshare.ukdataservice.ac.uk/857426/ |
| Description | Presentation at UK In a Changing Europe Economics conference |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Presentation and panelist on discussion session on the relationship between inequality and the economy. A charity advocating for prisoners asked about the link between inequality and crime, and Prof Houston facilitated a meeting with a colleague in criminology at the University of Birmingham to discuss collaboration. |
| Year(s) Of Engagement Activity | 2024 |
| Description | Presentation to Ministry of Housing, Communities and Local Government |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Presentation of research findings and policy recommendations as part of an external speaker workshop series organised by the Ministry of Housing, Communities and Local Government to promote Civil Servants' understanding of research and to discuss the policy lessons that can be drawn from research findings. |
| Year(s) Of Engagement Activity | 2025 |