Economic Cost of Brexit Project

The UK's vote to Leave the European Union highlighted the significant spatial economic and social inequalties of the United Kingdom. Populist party success is strongly associated with such spatial inequalties as early research has highlight. How have the UK's constituent regions and communities fared with Brexit too date? This project provides estimates of the cost of Brexit across regions and local authorities, too date.

The visualizations presented below are based on the research paper of Alabrese, Edenhofer, Fetzer and Wang (2024), Levelling up by levelling down: The economic and political costs of Brexit. This working paper describes in detail the synthetic control method as an econometric tool is applied to subnational economic activity data from the UK and other countries to both, estimate the overall economic impact of the Brexit-vote to date and to study how this cost is distributed across regions- and districts in the UK.

The Economic effect of Brexit across the United Kingdom

• Our analysis suggests that the economic burden of Brexit -- when measured as an output gap in percent of gross value-added -- is detectable for England, Scotland and Wales -- but not for Northern Ireland.
• The absence of the adverse economic effect of Brexit on Northern Ireland is not surprising since the region continues to be in a Customs Union with the European Union and may have been shielded the economic impact of Brexit
• We observe that the output gap for England in 2022 stands at -8.11% relative to the synthetic control estimate. This is notably lower compared to the estimated economic impact of -10.68% for Wales and -9.74% for Scotland.