Mapping Local Job Vulnerability

11th November 2020

Article from Fraser of Allender Institute 9th November.

Understanding the local economic impacts of the COVID-19 restrictions is crucial for assessing the potential long-term implications of this current crisis for local communities.

So far, we've discussed the sectors most exposed in the crisis and where - at a local authority level - they tend to be concentrated.

A challenge with this approach however, is that it is necessarily relatively broad-brush. There's often even more variation within a local authority as there is between two different authorities.

In this article, and in an effort to better translate the changes in economic activity that we are observing into what this means for local employment, we combine the latest sector GDP data for Scotland (to August 2020) with the latest small area employment data (for 2019) released last week by the ONS.

Our aim in doing so it to highlight how changes in economic activity at a sectoral level might impact on employment in local areas.

That is not to say that the employment impacts in each sector across areas will exactly turn out to be the same, in reality, some areas may see employment in the same sector change more or less than other areas. Similarly, just because activity (measured by GDP) in a particular sector is down X%, doesn't mean that employment will turn out to be reduced by the same %, it could be affected more or less. But what the analysis does do is provide an insight into the scale of ‘job vulnerability' facing local areas from the economy-wide shocks we're seeing at the moment.

Because sectors of the economy can be geographically quite concentrated, recessions stemming from a particular sector can have quite specific and profound local impacts. The decline of heavy industry for example. However, the pandemic has seen widespread economic declines across sectors of the economy - with few sectors in Scotland now larger than they were at the end of 2019. What we want to highlight in this article is the spatial pattern of job vulnerability implied by these declines in activity across Scotland.

We highlight a few things in this analysis.

First, given that we have seen activity in almost all sectors decline and stay below its level in December 2019, there are significant numbers of jobs that are vulnerable across all of Scotland.

Second, while most of the jobs in the Accommodation and Food Services sectors - the sector in the frontline of this crisis - are in cities, the parts of Scotland which are most exposed to declines in activity in this sector are actually mostly rural.

Cities have much more sectoral diversity of employment, and even the substantial declines in activity that we have seen in Accommodation and Food Services are not as notable in terms of overall employment in most urban areas.

What this means is that, if we are to ensure local economic resilience across Scotland, we need to remember the reliance that certain parts of Scotland have on employment in a small number of sectors.

Maps!

What do we mean by small area here? We’re focussing on intermediate datazones, these are summarised as follows:

"Intermediate zones are a statistical geography that sit between data zones and local authorities... [and are] designed to meet constraints on population thresholds (2,500 – 6,000 household residents), to nest within local authorities, and to be built up from aggregates of data zones. Intermediate zones also represent a relatively stable geography that can be used to analyse change over time, with changes only occurring after a Census. ...there are now 1,279 Intermediate Zones covering the whole of Scotland."

The employment data that we are making use of are from the Business Register and Employment Survey, you can find out more details about the data here. These provide good resolution of employment at a local level, focussing on employment in an area rather than the employment of people living in that area –in the jargon, this is a workplace-based measure.

We use these data to understand the composition, by sector, of employment in each of Scotland’s intermediate datazones, and then map changes in employment to changes in overall economic activity.

To do this, we make use of the latest Scottish GDP data from the Scottish Government. To provide the most up to date insights, we make use of an experimental monthly GDP series the Scottish Government has started producing earlier this year. This gives us the following pattern of sectoral impacts of the pandemic through to August 2020.

Read the full article HERE