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Urban Economics Reasearch Paper: Describe,explain and reflect upon the changing structure of the urban area.

Edinburgh and its urban structure:

About 8% of Scotland's population resides in itscapital city Edinburgh. In the recent years, Edinburgh has been seen to be aflourishing city with a perky labor and housing markets and a stable economicgrowth.For working adults, it has an employment rate that is near the UK average of 74.7%.The financial sector of Edinburgh is exceedingly developed and this has provento be beneficial to its economy. Another factor that has given benefit to itseconomy is the fact that the government administration is concentrated in thecity and recently the Scottish Parliament was established there. Moreover theEdinburgh Festival, in particular, attracts tourists from around the world.Despite these facts, there are some areas in the city which are povertystricken that are condensed in council housing estates. However, comparativelythis is on a small scale. An additional downside is that manual workers arefacing declining opportunities.

Important Statistics:

The population of Edinburgh rose considerably by7.1% to 444,624 between 1991 till 2001 and this growth rate is more than anyother city in Scotland. It has a high proportion of young adults who areworking (47%) and a low percentage of children that are dependent (16%).In 1991a survey was conducted regarding the population which showed that 97.6% of thepopulation was White which later decreased to 95.9%. Before this census it wasnoted that one sixth of households moved in Edinburgh and more than half of thepopulation lived in flats or tenements.

Out of three only one household had a single adult. In 2001 the economic activity rate was 67% and Glasgow was at 60% while then unemployment was at 4.3%. The jobs in Edinburgh are seen to move away from the manufacturing sector and in 2001 only 7.5% of the workforce was in the manufacturing sector. The professionals form about more than one sixth of the total working population and it was observed that about 12% of the working age population was involved in full time studies. 12.3% of the people have no central heating in the houses and about 40% do not possess a car.

The health problem is great with 39.8% informing that they have a long term illness. However this is still lower than Scotland and Lothian as a whole at 57.4% and 49.3% respectively

The Council's Housing Needs Assessment 2000showed that there is an overall similarity between Edinburgh and Scotland. The housing market has divided the population between areas. Pensioners areconcentrated in the South West, North West and South East areas whereas loneparent households are mostly in the South East area only. The Central areahouses a high proportion of single adult households (50%) and 54% of thepopulation is between the age group 18 to 34 years. Younger adults are found tobe in the Outer Central where 38% belongs to the age group of 18 to 34 years.The Waterfront area has a similar high proportion of people that belong to thisage group. The city average of non-White people in Central area is at 6.1% ascompared to 3.3%

The Edinburgh Economy

Population

According to the population estimate that hasbeen conducted recently (2002), it is known that Edinburgh's population hasreached 448,000 and this has put Edinburgh up at second in the largest andfastest growing cities of Scotland. This increase of population was a rise by3% since 1991 i.e. there was an increase of 12,000 residents in contrast to thetotal decline in the population of Scotland by 0.4%. This increase in growth inthe population of Edinburgh was part of a growth trend there.

Recent statistics (2003) show that 311,000people are employed in different organizations and businesses. This figurerepresents the 14% of all employment in Scotland. Knowing the fact that Edinburgh accounts for a minor part of the whole population of Scotland at 8%, the cityprovides employment to people beyond its boundaries. Employment rate has beenincreasing in Edinburgh and especially in areas like Midlothian and West Lothian. Although the number of jobs increased in Midlothian and West Lothian wasgreater than in Edinburgh as a whole, the jobs at Edinburgh increasedapproximately by 30,000.

In the last 20years, Edinburgh has emerged out to become one of the most flourishing citiesin the United Kingdom. It was observed in 2001 that the GDP in Edinburgh wasover a third greater than the GDP of entire Scotland . The same holds true for theaverage gross weekly earnings of employees working full-time. That figure isgreater for the people in Edinburgh as compared to Scotland as a whole.According to an analysis made in April 2002, this was 112.6% of the Scottishrate thus being at 480.60.

Unemployment ratesare low in Edinburgh being at 2.2% in 2002 (6,737 people), which was the lowestlevel and was greatly lower that the Scottish average. Thus Edinburgh has highemployment rates as compared to Scotland as a whole and in 2001 it was observedthat the service sector gave most of the employment opportunities at 87.6% of all the jobs in Edinburgh.

Table 1 explainsin detail the employment structure in the city as well as the region by theIndustrial sector. Finance and business service sectors are of vital importanceto local employment and this is seen to be evident as it has been acting likepillars of strength of the economy of the city and have been potentially growingwithin the national economy.

Table 1

Employment structure, 2003

Source: Annual Business Inquiry crown copyright (NOMIS)

The increase inthe population of Edinburgh is not due to excess birthrates, although thenumber of births has been known to exceed the death rate, but the increase ismainly because of people migrating to the city. This shows the strength of theeconomy of the city. The study of the demographic trends in the housing marketin Edinburgh is of significant importance. West Lothian and Midlothian haveundergone a population increase while East Lothian and West Lothian have alsobeen exposed to a high in-migration.

Thus the population of the entire city has been increasing due to both the factors i.e. natural increase and in-migration. Recently conducted estimates (mid-2002) regarding the number of households in the city of Edinburgh show that there are 207,080 households. The period from 1991 till 2002 has witnessed and increase in the number of households that is three times greater than the actual increase in the population of Edinburgh. This holds to evidence as to the social and economic changes that have caused in the formation of smaller households.

ProjectedPopulation and Household Change, 2002-2016

Analysts have cometo a conclusion that these trends would continue in the future. It is estimatedthat the population of Edinburgh will increase at a rate of 0.4% per year i.e.an increase of 54,700 residents. On the other hand, Scotland as a whole wouldexperience a decline by 0.1% per annum. There are only 11 local authorities in Scotland that are expected an increase in population and Edinburgh is one of them. It isalso estimated that the period stretching till 2016 will witness an increase inindividual households in Edinburgh would be greater as compared to the populationas a whole.

Table 2

Population change, 1991-2002

Source: GROS mid year estimates

Table3

Employmentchange by industry, 1998-2003

Edinburgh CityRegion Scotland

Source:Annual business inquiry crown copyright (NOMIS)

Employmentforecasts, 2003-2007

In Table 3 therate of change in employment by sector in Edinburgh and its region is comparedto Scotland. Finance and business services have been the fastest growing sectorat the national level. This sector has been growing at a higher rate ascompared to other areas in Scotland. The pattern as observed reflects thedegree to which Edinburgh is a center for high level functions. The employmentrate has increased greatly in the headquarters as compared to the branchesspread out. Due to an increase in tourism spending and leisure, Edinburgh has greatly benefited from the increase in employments in Catering, Hotels andDistribution.

owever, in the 'employment shedding' manufacturing sectors, the city has relatively few jobs. There is an expected rise in the employment in Edinburgh by 4% over a period stretching from 2003 to 2007. This shows an increase of 13,000 jobs. Similar steady rates are expected in West Lothian and Midlothian. The pattern of growth however is expected to change from the recent past and the increase would mainly be in Distribution, Hotels, Catering and public services. Employment in business services and finance is forecasted to grow but at a relatively lower rate than what was observed in the past.

Table 4 gives thedata on average earning in Edinburgh. The data is recorded in terms of place ofresidence as well as place of work of the people in the survey. In 2003 theaverage earning of people in the city region was 453 per week i.e. 23,500approximately in a year. Comparing this to Scotland, it was found that theaverage earning of the people in the city region was slightly greater. Peoplewho lived in Edinburgh city earned 481 per week. This was at an increase ofabout 10% to the Scottish average. An important point to note is that theseearnings are given at an average and ground realities show a great variation inthe earnings of the residents of Edinburgh.

For example, in 2003 it was observed that 10% of all the residents of Edinburgh earned 220 or less per week as compared to the top 10% who earned more than 828 per week. People whose workplaces were within Edinburgh were rated to be the second highest average earning in all of Scotland in 2003. These figures make it an obvious point to note that the higher paid jobs were filled in by the people who lived in Edinburgh while the lower ones were occupied by those outside the city commuting to work. The Census data exhibit that (in 2001) the net inflow of people commuting to work in Edinburgh from outside was around 60,000.

Table 4

Average gross weeklyearnings, 2003

/week %of Scotland

Work-based residence-basedWork-based residence-based

Source: New Earnings Survey

Unemployment ratesin Edinburgh are lower as compared to the Scottish average. In 2004 it wasrecorded that the proportion of the population that were of the working age andwere receiving Jobseeker's Allowance was 2.2% as compared to the Scottishaverage of 2.7%. If a wider measure is adopted to study this deeply thenstriking differences are noted.

Table 5 exhibitsthat the proportion of the working age population dependant or receiving statebenefits of Edinburgh was much lower as compared to the rest of Scotland. However it is also interesting to note that the proportion of working agepopulation in employment in Edinburgh was lower than the rest of Scotland. This difference is because of the large female population that are of working agebut are neither working not claiming any benefits from the state.

Table 5

Economic Activity and Benefits

Source: Scottish Neighbourhood Statistics

Scottish Index ofMultiple Deprivation, 2004

An inclusive setof indicators of deprivation in small areas throughout Scotland is brought together in the Scottish Index of Multiple Deprivation 2004 (SIMD04). Variousdimensions of factors such as economic and social deprivation, including incomes,health, housing, accessibility, employment and health are included in theindex. Information for each data zone in Scotland is collected and each areaaccording to its level of deprivation is ranked. It is seen that Edinburgh has areas of high deprivation however the proportion of the population in theseareas is much lower than the Scottish average. 20% of Edinburgh's populationwould be living in data zones which would rank in the most deprived 20% in Scotland if Edinburgh had been under similar conditions as the rest of Scotland. As this is not so,only 13% of Edinburgh's population is found to live in these areas that fall inthe most deprived 20% in Scotland.

Summary

Edinburgh has been experiencing a growth in its population due to the growthin its economic sector. It is also seen that the incomes in Edinburgh arehigher as compared to the rest of Scotland. The unemployment rate is lower andthe percentage of people dependant on benefits from the state is also low inthis city. This city has people traveling into it for work from other regionsand thus can be considered as an employment center. Although the business andfinance sectors would grow in the future, their rate of growth would be less.However increasing growth will be observed in distribution, hotels and cateringdue to increased tourism. The economy as a whole seems to be stable and will inthe future generate more employment opportunities.

Housing Supplyand Demand

Edinburgh's housing system differs from the rest of Scotland and has some distinctive features to it. Private rending and owner occupation is high ascompared to the Scottish average with a small rented sector. There are a higherproportion of flats as compared to the proportion of houses which is relativelylow. Housing issues are complex in Edinburgh due to the fact that while thecity is prosperous, there are areas of deprivation. Limited affordable housingwith a high demand in housing, coupled with deprivation give rise to complexhousing issues.

Owneroccupation

It is seen that69% of the homes are occupied by the owners out of which 40% are bought with amortgage and 27% are owned outright. Moreover it is observed that owneroccupation as a whole and houses that are owned outright are higher as comparedto Scotland. The reason for the high percentage of outright ownership would beaccounted for the in-migration of relatively wealthy people as compared to thein-migration in other cities of Scotland. Moreover the presence of peopleearning high income who would prefer not to purchase through mortgage couldalso account for this fact.

Regardless of the existence of flats and small houses, the prices are high as compared to the rest of Scotland. The average price of a house in Edinburgh in the first half of 2004 was 165,000. At 354,000 were the prices for newly built properties in the Rural West part of Edinburgh. This was seen to be the highest mean price.

Health needs

It is important touse a variety of information to study and analyze the social issues and healthneeds in a city. High level 'administrative' data like that of the Census showsthe operation of city partners within. Differences found in health amongst thevarious groups in a society are known as health inequalities. There are manyinequalities in Scotland and JHIP aims to address these issues and eliminateinequalities which are caused by reasons that are complex and interacting. Some of these factors includethe physical factors like exposure to poor housing, socio-economic factors,behavioral factors (smoking or drinking) and psychological factors which wouldinclude exposure to adverse life events.

These aspects are expressed clearly in the data on health provided in the Vision For Edinburgh monitoring reports, 'Measuring Edinburgh's Performance' July 2002 and 2003. One such factor is the low birth weight which is related to many immediate and long-term health risks. In Edinburgh's community planning process, this is regarded as the key health indicator. This factor is prevalent in areas of social disadvantages rather than in Edinburgh as a whole. In a period ranging from 1991 to 2000, it was seen that the number of teenage pregnancies, who gave birth to a child rather than aborting it, has been four times greater in the Social Inclusion Partnership (SIP) areas than in Edinburgh as a whole.

Socio-economicfactors, life circumstances, genetic factors, lifestyles and factors of placeare some of the important factors which affect the death rate. In the sameperiod from 1991 to 2000 the death rate for under 65's in the SIP areas washigher as compared to the city as a whole. This gap widened more in the periodranging from 1997 to 2000. In 2001 the figures saw a reversal in the trend asthere was a reduction in the death rate for under 65's in SIP areas but the gapstill exists. Self-harm and self-poisoning have also been at a high and in theperiod of 1991 to 2000, this occurred at a higher rate in the SIP areas ascompared to Edinburgh as a whole.

It should be noted that the occurrence of such events and the gap between the SIP areas and Edinburgh as a whole has been decreasing. The credit for this would be given to the establishment of the assessment unit at the Royal Infirmary which dedicates itself to reduce the number of repeat incidents of self-harm. It should also be noted that health inequality is not solely linked to the existence of social disadvantage and poverty and it was seen that the flatted accommodation in Edinburgh adversely affected those with reduced mobility.

Homelessnessapplications in Scotland come from all the cities and Edinburgh ranks second init. However this is about less than a third of the presentations recorded in Glasgow (Scottish Executive, 1999). Voluntary agencies are providing a range of services includinghostels, and other facilities for the young people who are homeless andcomparatively this is less extensive than the one present in Glasgow and thelargest hostel in Edinburgh is Council with 70 bed spaces. The RSI has funded a'single access point' for the homeless people but there is still a shortfall inhostel accommodation, emergency accommodation in particular.

A change will come about though after the projects of RSI become functional fully. A 'Homelessness Liaison Officer' has been appointed by Lothian and Borders Police for Edinburgh. There was street culture in Edinburgh to a certain extent as well. However, homelessness services in Edinburgh have been enhanced significantly and improvements are expected in the future.

Conclusion:

Edinburgh is a thoroughly urban city with all the usual urban problems includingunemployment, homelessness and health inequalities. However concrete steps havebeen taken to counter these problems especially the problem of homelessnessthat has been afflicting the city's economic resources. Serious steps need tobe taken on city as well as regional level to introduce better housingfacilities and to absorb more jobless people into city's various businesssectors.

References

Bailey, N., Turok, I. and Docherty, I. (1999) Edinburgh and Glasgow: Contrasts in Competitiveness and Cohesion. Glasgow: Department of Urban Studies, University of Glasgow

Office for National Statistics (1999) Labour Force Survey Quarterly Supplement, November1999. London: Office for National Statistics.

A. O'Sullivan. (2002) Urban Economics. McGraw-Hill UK.

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