With the Government about to trigger Article 50, now is a good moment to look at what labour market data can tell us about the differences between Remain and Leave areas. While there’s been no shortage of analysis on the differences in local areas, much of it has focused on wider demographic or economic indicators, rather than more specific details like the kinds of jobs that people do.
Using our data on jobs by occupation at local authority level, and downloading the referendum results from the Electoral Commission’s websites, we started off by asking a simple question: are different jobs concentrated in Remain areas and Leave areas? To test this, we created a Location Quotient for each of 367 detailed occupations across Leave Britain and Remain Britain. Location Quotients (LQ) divide the share of each occupation with the area over the national share, so that anything over 1 is relatively specialised.
It’s worth saying that, despite the “divided Britain” stories we sometimes here, labour markets aren’t that different overall: only something like 12% of people would have to change occupations for the two areas to have a similar split across occupations.
But small differences can still be significant. To test the difference between Remain and Leave areas, the first chart here looks at different occupations by their LQ in Remain areas (Leave areas offer the mirror image). Each occupation is plotted by its LQ on the x-axis, so that where LQ>1 an occupation is specialised in Remain areas; on the y-axis we plot median earnings, and the size is the number of jobs. The result is clear: Remain areas specialise in jobs with higher pay, and have relatively fewer of many jobs with lower pay:
So what are those jobs at either extreme? In the next chart, we have set out the Top 10 most specialised jobs for Leave and Remain areas. Again, the result is quite telling, and confirms some of the anecdotes we tell in discussions about the divisions indicated by the referendum results: Leave areas have their highest specialisations in industrial jobs, ranging from tool-makers to production line workers; Remain areas have their highest specialisations in creative and professional roles, with arts, advertising and journalism right up there, along with legal professionals.
Taking the Top 20 in either case, we have next constructed the Location Quotient for each of the leading Remain and Leave jobs for every one of 380 local authorities, and plotted them against their vote in the referendum. What is striking here is the difference: the Leave Top 20 jobs are much more evenly distributed across many local authority areas, whereas the Remain Top 20 jobs are heavily concentrated in a small number of areas, all of which voted strongly Remain.
So, for example, there are nine areas with LQ over 2 for Remain Top 20 jobs. Of these, seven are in London, with Oxford and Cambridge making up the list. Between them, they account for 295,000 jobs in the Top 20 list, more than a quarter of the workforce for these jobs across the UK. Across the nine areas, they had a Remain vote of nearly 72%. By contrast, the top nine areas for Leave Top 20 jobs account for fewer than 5% of the workforce for these jobs, and had a total vote of 56% remain.
Finally, in a lot of the discussion about the motivations for the Leave vote in the referendum last June, there has been a narrative about voters being “left behind”. That’s a bigger question than this post can answer, but just to touch upon it, the last chart shows the results of a “Shift-Share” analysis on jobs growth across each of nine headline occupational groups across Remain areas, from 2003 to 2016.
Shift-Share analyses use a comparison of area growth with national growth to seek to understand whether area growth simply reflects national trends, or is growing beyond it. For example, if whole of Great Britain’s employment grows at 5%, then we’d expect Remain areas to also grow at 5%. If, in addition, professional jobs are growing at 10% across Great Britain, we’d expect that to show through in areas which start with more professional jobs to start with.
The end result of a Shift-Share analysis is that part of growth which can’t be explained by national trends or the composition of growth; it’s the result of competitive forces driving for or against that area. In this last chart, we look at the “competitive effect” on jobs for Remain areas (Leave areas, as the other half of the country, have the reverse picture), and we see that in all but one category – process, plant and machine operatives – Remain areas have seen a swing of jobs to them, and this is most of all the case with higher-paid managerial, professional and technical roles.
Duncan Brown is Emsi UK’s Economist and Director of Consulting and Innovation. If you have any questions about the data and analysis in this piece, you can contact him at email@example.com