Spatial Economics Research Centre Proposal

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Economic prosperity in the UK is very unevenly distributed across space. Tackling these persistent disparities is a key policy objective. Providing a rigorous understanding of the nature, extent, causes and consequences of these disparities, and identifying appropriate policy responses, is the primary objective of the Spatial Economics Research Centre (SERC). The impact of the recession and the government's fiscal position increase the importance of developing this rigorous understanding if we are to identify appropriate policy responses.The Centre structures its research around five inter-linked programmes focused on the following central questions:- What matters more - 'who' you are or 'where' you are? For example, do low skilled workers do badly wherever they locate? If so, is the spatial concentration of low skilled workers in particular places enough to understand the differences between places? Or is it that where someone lives or works has an additional effect on outcomes? In other words, to what extent are spatial disparities the result of the sorting of more productive sectors, firms or workers versus causal place-based effects on outcomes? Are these differences offset by the costs of living and producing (e.g. higher house prices and rents)? What other factors matter for the value of places and for wellbeing? Are the answers changing over time as a result of the recession? Programme 1 on the scale and nature of UK spatial disparities focuses on these issues.- Even if place does not matter, what drives the spatial concentration of particular types of workers and firms in particular places? If place does matter over and above individual characteristics, then what causes these effects? In other words, through what channels do place-based effects arise, does sorting play a role, and are there feedbacks between the two? How do land and real estate markets function to determine the offsetting costs? What role do market failures and policy play? Individuals and the interaction between migration, labour and housing markets will be one focus of our research. Another will be firm innovation and enterprise and the commercial land market. These projects are necessarily overlapping, but we structure our research by analysing the causes of place-based effects and of sorting in Programme 2, while Programme 3 considers housing and land markets. - What are the implications for the spatial structure and evolution of the economy and for the linkages between places? Why are the resulting spatial disparities important? How are the answers to these questions changing in response to globalisation, technological change and other factors? These questions are covered in Programme 4 on the structure and evolution of the spatial economy. Increasingly, our research in this area focus on the impact of specific policy interventions to both understand the impact of the policy itself and to use the intervention to better understand the workings of the spatial economy.- What role does government play in shaping these inequalities? What policies and governance arrangements are most appropriate to tackle them? Will decentralisation ameliorate or accentuate disparities? Programme 5 on spatial economic policy and governance focuses on these issues.