London’s Unemployment in the 1990s: Tests of Demand-Side Explanations for its Relative Growth

The recession of the early 1990s saw London shift from being one of the best performing regions in terms of unemployment to one of the worst. This paper takes employing units (workplaces) as the primary unit of labour demand and uses evidence from them to test potential explanations for London's less favourable unemployment record in the 1990s. The paper finds evidence that differences in both the quantity and the nature of labour demand contributed to London's deteriorating unemployment record and that the relatively poor growth of skills amongst Londoners exacerbated this.