Economic shock and regional resilience: Continuity and change in Canada's regional employment structure, 1987–2012

Abstract

This article analyses regional resilience to economic shock in Canada from 1987 to 2012, a period that included severe recessions and major free-trade agreements. Employment is cross-tabulated by region, industry and gender and partitioned cumulatively using three-way multifactor partitioning for each period from 1987–1988 to 1987–2012. Employment loss in each recession is found to be more closely associated with industry-mix in the preceding growth period than with the region effect. At each recession, manufacturing had much bigger employment losses and a much weaker recovery than business services. Thus manufacturing amplifies economic shocks, while business services act as regional shock absorbers. Manufacturing employment decline in Ontario was influenced by trade liberalization and far exceeds what would be expected from the industry and region effects alone. Female employment growth outpaced male employment growth in every region and in every industry group apart from business and appeared to be more resilient to recession. But corrected for their industry composition and regional disparities, these gender differences are substantially reduced.

New directions in researching regional economic resilience and adaptation

“…Institutions will be crucial for organising the relations and interactions between actors and Economic base • Diversity in the economic structure and a composition with little dependence on procyclical industries (such as manufacturing), will diminish the impact of shocks (e.g. Brown & Greenbaum, 2016;Giannakis & Bruggeman, 2015;Groot et al, 2011;Martin et al, 2016;Ray, MacLachlan, Lamarche, & Srinath, 2017).…”

Which Sectors Really Matter for a Resilient Chinese Economy? A Structural Decomposition Analysis

“…Economic structure is considered to be a crucial determinant of economic resilience [9,26,35]. To date, studies that address the causal relationship between economic structure and resilience focus on identifying the relative vulnerability of different industries or sectors and sectoral composition in accounting for a given region's ability to withstand a recession.…”

“…Manufacturing is typically assumed to be a vulnerable sector whereas services are shown to be comparatively more resilient in the Western literature [21,36]. In an empirical study of job losses as a consequence of severe recession from 1987 to 2012 in Canada, it is argued that compared with the business services the manufacturing sector is less resilient to economic shock [9]. Pursuing a finer-scale approach to the subject of resilience to recession, transport equipment was found as the most recession-sensitive of 14 sectors in the EU-wide business cycle [21].…”

“…At the national level, the European countries differed significantly from each other in terms of their responses to the financial crisis of 2008 [8]. Within a specific country, i.e., Canada, resilience literature assessed the importance of industry-mix and regions within the country to account for differences in regional resilience to economic shock [9]. Study about the relationship between regional policies and resilient outcomes examined the ways in which regional policies intersect with exogenous and endogenous factors to explain the relative resilience of various regions with a case of Turkey [10].…”

The elusive quest for balanced regional growth from Barlow to Brexit: Lessons from partitioning regional employment growth in Great Britain

“…The mathematical flaws in the first paper of G D A (later Sir Donald) MacDougall for the Barlow Commission, which introduced shift‐share, have been detailed elsewhere and a corrected MFP model has been developed (Gardiner et al, ; Johnston & Huggins, ; Lamarche, Srinath, & Ray, , Ray, ; Ray, Lamarche, & Beaudin, ; Ray, MacLachlan, Lamarche, & Srinath, ). MacDougall’s most serious error was to include the national growth rate of 22.3% for the period 1923–1937 in with the industry‐mix effect, a conceptual error corrected in the Dunn shift‐share model (Table ).…”