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A research note on the Brexit referendum and regional unemployment in the UK: a synthetic control method approach

Abstract:

Purpose: In the 2016 Brexit referendum the electorate decided that the UK would leave the European Union (EU), the first country to do so. The decision to leave the EU was a controversial choice, especially because of the geographical divide over the decision. In some regions, an overwhelming majority voted to stay within the EU, while in others the electorate displayed a marked preference to leave. Design/methodology/approach: We employ the synthetic control method to examine the short-term impacts of the Brexit referendum on unemployment in the 12 UK regions. Findings: Our results show that the impact has been modest and that there is no clear relationship between voting in favour of Brexit and the level of unemployment after the referendum. Originality/value: Our contribution is the first study to estimate the short-term impacts of Brexit on unemployment in the UK regions and is a topical and timely contribution to the debate on the future of the European Union.