Employment trends outside cities and towns, England and Wales: 2009 to 2021

This research used data made available via the Office for National Statistics (ONS) Secure Research Service, which is being expanded and improved with ADR UK funding.

Authors: Aaron Walton, Sebnem Oguz, Kenadid Valent and Joey Tobitt (Office for National Statistics)

Date: January 2023

Research summary

A research project using secure data found that from 2009 to 2021, employment in England and Wales grew by 20% in out-of-town locations. This is compared with 7% in towns and 14% in large cities (excluding London). This research introduces new data and analysis on employment growth in out-of-town locations, which is expected to help inform central and local government policy.

Since 2019, the Office for National Statistics (ONS) has published a range of articles examining data for towns in the Understanding Towns series. These have provided data comparing different types and sizes of towns, as well as comparing towns with cities. However, they have not previously included comparisons to out-of-town locations. This research shows how employment growth has differed between out-of-town locations, towns, and cities from 2009 to 2021.

Data used

This project accessed the Business Register and Employment Survey (BRES) through the ONS Secure Research Service.

The BRES is a business survey which records a job at the location of an employee’s “local unit” workplace. It is regarded as the primary source for official government employee and employment statistics at a detailed regional and industrial level.

DOI (Digital Object Identifier): Office for National Statistics, released 07 December 2022, ONS SRS Metadata Catalogue, dataset, Business Register Employment Survey - UK, 10.57906/m3dm-jp03

Methods used

Researchers used BRES microdata with the National Statistics Postcode Lookup (NSPL) to estimate employment for England and Wales at various geographies.

This research uses the traditional version of shift-share analysis, which takes the change over time of an economic variable - such as employment within industries of a local economy - and divides that change into various components. In this version, regional economic growth is divided into three components:

• A national component: This is the change in a region that would have occurred if the region had grown at the national rate. It measures the effects of macroeconomic fluctuations on change.
• An industry-mix effect: This measures the change that occurs if all industries in each region had grown at the national industry rate.
• The residual component: This is the difference between the actual change in the region and the sum of the other two components. It captures regional characteristics such as local labour characteristics, superior suppliers, and the local policy environment. The residual component is often referred to as the ‘regional competitiveness effect’.

For this analysis, towns are defined as any settlement with a population of 5,000 to 225,000 (according to the 2011 Census). This definition ensures the largest towns in England and Wales are included, as well as smaller cities.

Research findings

Between 2009 and 2021, employment in England and Wales grew by 20% in out-of-town locations compared with 7% in towns and 14% in large cities (excluding London). The researchers found that employment growth was highest in London at 28% over the same period. On average, towns had lower employment growth rates than both cities and out-of-town locations since 2009. This result holds for different sized towns, with growth rates for small, medium, and large towns ranging from 7% for medium towns to 8% for large towns.

Figure 1 below shows that towns accounted for 52% of total employment in England and Wales in 2021, compared with 14% for out-of-town locations, 19% for London, and 15% for large cities. Due to the greater share of overall employment in towns, they contributed 30% to total employment growth across England and Wales from 2009 to 2021 – even with a lower growth rate. Out-of-town areas accounted for 19% of total employment growth during the same period. Employment levels remained higher in town locations than out-of-town locations over the 2009 to 2021 period, but the employment growth rate was much higher in out-of-town locations