Brexit will have a greater impact on the UK regions than on the rest of the EU
Frank van Oort, Professor of regional and urban economics at Erasmus School of Economics, evaluated in his study the consequences of the Brexit. Together with Wen Chen (University of Groningen), Bart Los (University of Groningen), Philip McCann (University of Sheffield), Raquel Ortega-Argiles (University of Birmingham) and Mark Thissen (PBL Netherlands Environmental Assessment Agency), he evaluated the consequences of Brexit for the UK regions. They did this on a request of the British government and they focused their study on the Brexit exposure of regional labor income, rather than of regional GDP.
The main reason to focus on the extent to which regional labour income is exposed to trade barriers due to Brexit, is that profits are not sternly tied to the region where economic activity takes place, since they are often ‘repatriated’ to company headquarters. In contrast, commuting between regions defined at NUTS2 level is limited, so labour income can be considered as more ‘sticky’. They have created a new interregional dataset to quantify the shares of regional labour income that are exposed to the implications of Brexit for trade, taking into account the indirect effects of supply chain relations. The results show that much more is at stake for UK regions than for the rest of the EU, despite the fact that the rest of the EU is a net exporter of the UK.
If you would like to read more about the research, you can find a summary here.