Regional Employment Polarization in a Time of Crisis: The case of Interwar Britain

This article aims to identify the impact of regional employment polarization on labor frictions in a time of crisis and structural change by examining the case of interwar Britain. Using an original dataset from the regional returns of unemployment insurance administration, this article estimates the aggregate and regional Beveridge curve shifts, which allows the breakdown of labor frictions into spatial mismatching (interregional frictions) and frictions within regions (intraregional frictions). The latter were the main source of labor frictions during the interwar period, but the former significantly contributed to the mass unemployment observed in the Great Depression.

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