Measuring industrial restructuring pressure in regions

Industrial restructuring is a place-based process, shaped by the geographic concentration of sectors. As a result, sector-specific shocks lead to uneven regional impacts, with some areas experiencing large job losses. Place-specific shocks, such as mass layoffs, add to the uneven geography of industrial restructuring. No single indicator has yet captured the full scope of industrial restructuring pressure (IRP) across places, time periods and types of shock. This paper fills this gap by introducing a new IRP index that aggregates employment outflows across declining sectors and puts additional weight on sectorally concentrated outflows. Its main objective is to map diverse socio-economic adjustment pathways followed by places exposed to IRP. The paper illustrates the properties of the index and provides an example of its empirical application on Functional Urban Areas (FUAs) in six OECD countries (Finland, France, Spain, Sweden, United Kingdom, and United States).