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Dr Neil Lee

Census 2011: Skills are moving south

Authors: Dr Neil Lee Dr Neil Lee

01 February 2013

The geography of highly skilled workers matters. Better qualified people tend to earn more, so the geography of skilled workers is one of the main drivers of regional disparities. Other workers gain too, as workers in cities with more skilled residents generally earn higher wages.

This makes new evidence on the geography of skills concerning. We’ve used the 2011 Census to investigate which cities have seen increases in their highly skilled populations over the past ten years (using share of population with NVQ 4 + as a proxy for skills). And the results are clear: skills are clustering in skilled cities.

The largest increases in the share of the population with degrees have been in those cities which had the highest skill levels in 2001. The cities which saw the largest increases were Crawley (9.2%) and Milton Keynes (9.1%).  Doncaster and Rochdale / Oldham had the smallest increases, and were also amongst the least skilled in 2001. Each additional 1% of the population with a degree in 2001 is associated with an extra 0.12% now.

Share of population with degree in 2001 and change 2001 - 2011

Source: 2001 / 2011 Census via Nomis. Cities are the SOCD cities defined by CLG, but with 2001 Travel to Work Areas.

We need to be open about the provisional nature of the data. We know there is at least one reason the data isn’t perfectly comparable: for 2001 we used the percentage with NVQ4+ out of the population aged 16 – 74, whereas in 2011 the population is everyone 16+. But a small difference like this is unlikely to be skewing the results. (I’d be delighted to hear from anyone else who can think of other issues.)

Share of population with degree in 1981 and change 1981 – 2001

Source: State of the Cities database. Cities are the SOCD cities defined by CLG, but with 2001 Travel to Work Areas.

And the effect in the 2000s may have been less marked than in previous decades. In our report, ‘Cutting the Apron Strings’, we noted that it was the public sector that was creating skilled jobs outside of London and the South East. Given public sector cuts, this is unlikely to be continuing. Looking at the results from 1981 – 2001 gives a starker picture, less confused than that for the more recent period.

So what’s driving these changes? Essentially, the economy over this period has shifted towards more highly skilled industries. These jobs tend to be based in cities that already have skilled entrepreneurs, workers and firms. A new firm reliant on skilled workers needs to locate in a city that already has a large skilled labour force – few firms have the scale to set up shop and attract new skilled workers. Skilled workers know that these cities offer their best chance of a good job. And because this is based on the decisions of both firms and workers, who face powerful incentives to come together, these trends will be hard to reverse.

* These results are very similar to those in academic work on the United States in the 1990s, which found an increase of 0.14.

 

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