How has deindustrialisation affected living standards in the UK?

Britain’s industrial decline has reshaped its economy and altered people’s lives. From job losses to worsening health, the impact of deindustrialisation runs deep, with scars that stretch across generations and regions.

Once known as the ‘workshop of the world’, Britain now has one of the lowest levels of industrial activity among developed nations. From car manufacturing in the West Midlands to steel in Sheffield and South Wales or coal mining across the East Midlands and North East England, industrial employment in the UK has largely ground to a halt. Entire regions have witnessed the collapse of the industries that sustained their local communities for generations, starting in the first decade after the Second World War.

Deindustrialisation in the UK has had lasting effects on people’s wellbeing. The disappearance of industries such as coal, steel and shipbuilding has contributed to higher rates of long-term sickness, declining life expectancy and surges in regional economic inactivity. While the loss of industrial jobs began decades ago, its consequences are still visible today.

Former industrial areas are characterised by persistent health problems and reduced employment opportunities. Evidence suggests that these effects have been felt not only by those who lost their jobs but also their children and grandchildren. Economic change can carry severe intergenerational costs.

Deindustrialisation in Britain is an old question

In 1996, the Royal Economic Society (RES) published a ‘controversy’ series of papers in the Economic Journal, exploring the ‘causes of the poor British industrial performance over the period since 1960’ (Dixon, 1996). Four studies by leading economists quantified the phenomenon and provided their views on its causes.

So, the question of Britain’s low growth and sluggish industrial performance is a not a new one. It existed before the global financial crisis of 2007-09 and it pre-dates the 1980s. While the average Briton ranked among the richest in Europe in 1945, this ranking started declining from the 1970s. Already in the RES series, the role of Britain’s rapid and stark deindustrialisation occupied a central position in explaining the nation’s economic decline (Crafts, 1996; Eichengreen, 1996; Eltis, 1996; Kitson and Michie, 1996) – see Figure 1.

But 30 years after these papers were published, the UK has failed to recover its relative position among wealthy economies. Deindustrialisation has continued its course – and this drastic economic transformation has had numerous consequences for people’s lives.

Figure 1: Share of employment in industry, UK versus comparator countries, 1945-2020

Source: Our World in Data, 2025

What are the consequences of deindustrialisation for individual wellbeing?

There is extensive research showing that job loss negatively affects people’s health and can even increase mortality (Eliason and Storrie, 2009; Kuhn et al, 2009; Sullivan and von Wachter, 2009; Rege et al, 2011; Autor et al, 2014; Black et al, 2015; Adda and Fawaz, 2020). Increases in mortality related to suicide, drug overdose and alcoholism have been linked to the weakening of community ties following the decline in manufacturing jobs, particularly in the United States – a phenomenon known as ‘deaths of despair’ (Case and Deaton, 2020). In certain contexts, worklessness can be lethal.

Industrial decline not only directly affects those who lose their job, but it also hits future generations. Research shows that when parents lose their jobs, their children are affected during the critical developmental years, leading to poorer long-term health as they grow up (Lindo, 2011; Wüst, 2015; Schaller and Zerpa, 2019; Mörk et al, 2020; Celini et al, 2022; Charris et al, 2024).

Most of this evidence comes from countries with different institutional structures to the UK (for example, the United States or the Nordic countries) and focuses on a relatively recent period. But what do we know about the UK, given the significance of its industrial decline?

Deindustrialisation triggers labour market adjustments

As manufacturers and industries disappear, they take many jobs with them. This then shapes labour market outcomes over the medium and long run.

Insights from recent economic theory and European data suggest that a severe shrinkage in demand for workers – such as those triggered by plant closures or mass layoffs – can have substantial effects on employment in a local area. As people leave to find new opportunities, the supply of labour and the demand for local services also shrinks, further reducing employment (Gathmann et al, 2018). The closure of a factory has economic implications that reach far beyond the facility’s perimeter fence.

Empirical evidence from post-industrial zones in the UK confirms the persistence of the effect, but also highlights that it varies over time. Focusing on the closure of coalfields, studies have found that the decline of the industry initially led to high unemployment. While unemployment eventually came down, this did not mean that all those who stayed behind found new jobs. Instead, a variety of different adjustments occurred. Crucially, men who lost their industry jobs displaced women from other manufacturing jobs (Aragón et al, 2018).

Over the medium and longer run, former industrial areas also appear to have higher numbers of people trapped in economic inactivity due to long-term sickness, with persistent earnings losses as a result (Fieldhouse and Hollywood, 1999; Beatty and Fothergill, 1996; Beatty et al, 2007; Upward and Wright, 2019; Rud et al, 2024).

Deindustrialisation affects health

Labour markets in the UK’s old industrial areas are characterised by high rates of permanent sickness. As an illustration, even after accounting for differences in age, the proportion of individuals with a declared disability that severely limits their daily lives is almost twice as high in the former coalfields compared with the South of England (Office for National Statistics census, 2021).

Evidence suggests that this is due in part to incentives within the British welfare system, which can be less generous to unemployed people than to those with health-related claims, and it can even punish claimants who want to re-engage with the labour market. In fact, worklessness due to incapacity is more than three times higher in the UK than the European Union (EU) average. As a result, these high rates of permanent sickness (that is, long-term health conditions that prevent people from working) are often primarily interpreted as correlating with high levels of ‘hidden unemployment’.

At any given level of poor health, incentives to remain in the workforce are lower in Britain than in other comparable countries. People in bad health may still work – for example, because their existing job pays well or is satisfying. But after losing their job, they will face a more difficult labour market where they struggle to find a new role compared with a healthier individual.

They must also navigate a welfare system that can punish people just for trying to enter the workforce – for example, if they fail to prove that they are actively job hunting (Beatty and Fothergill, 2016). So, if industrial decline also directly worsens health, then a disproportionate increase in incapacity-related benefits is not surprising. This is because deindustrialisation intensifies three drivers of these benefits: individual job loss; high competition for fewer jobs; and ill health.

Does industrial decline directly affect health? On the one hand, many industrial jobs are hard on the body, involving strenuous physical effort or exposure to toxic substances. On the other hand, the loss of these jobs will reduce income – a key determinant of health – and as unemployment often leads to heightened anxiety and stress, it can directly harm mental health.

Not only is job loss inherently stressful and a source of life dissatisfaction, but the social ties that disappear when industry jobs disappear are not always replaced in the new jobs available (Kassenboehmer and Haisken-DeNew, 2009; Case and Deaton, 2020). In other words, deindustrialisation can debilitate communities as well as people.

How has deindustrialisation in the UK affected health and wellbeing?

As UK growth stumbled and the economy began to shed more manufacturing jobs, objective health indicators worsened relative to other countries. For example, UK life expectancy ranked among the highest in the developed world in the 1950s. But today it ranks below most high-income countries – see Figure 2.

Trends in unemployment and suicide rates are also aligned throughout the 20^th century (Gunnell et al, 1999). Geographically, ill health is concentrated in former industrial areas in the North and around former coalfields, echoing recent discussions about ‘deaths of despair’ in the rust belt in the United States.

Figure 2: Life expectancy, UK and comparator countries, 1945-2022

Source: Our World in Data, 2025

The alignment of these trends does not demonstrate causality. But more detailed analyses do point in the direction of a causal link.

Using longitudinal data – which allow researchers to track people throughout their lives – it is possible to analyse the health of children born during a contraction in the coal mining industry (Brey and Rueda, 2024). Those who grew up in the most exposed areas are shorter, have more extreme weights (either over- or underweight), and have worse physical and mental health throughout their lives, despite being born with similar health indicators to their comparison group. Industrial wealth and local health are closely linked.

These are the ‘children of industrial decline’ – and today they still carry the scars of growing up through hard times. Their offspring – the third generation affected – also appear to be born with poorer health. The negative health effects of massive job losses can transmit across generations, putting at risk the fundamental democratic principle of equality of opportunity.

Living with industrial decline: adjustment and backlash

Industrial decline has led to weaker employment opportunities, increased joblessness and worse health. A natural reaction could be for people to move to places offering better opportunities.

But empirical evidence for the UK suggests that while there is a migratory response to regional employment shocks, it tends to be localised, with people moving from one neighbourhood to another close by. The effect is also distributed unequally across the population, with those who are better-off and more educated being more likely to relocate (Langella and Manning, 2022; Brey and Rueda, 2024).

Education – which is ultimately needed to access better employment opportunities – adjusts slowly. There is some evidence demonstrating that the shrinkage of coal mining is associated with a relative improvement in the share of men who have more than the minimum mandatory requirement for education (Brey and Rueda, 2024). But when looking at the probability of actually finishing tertiary education – a key driver of income inequality today – there is still a significant gap between former coalfields and the rest in Europe (Esposito and Abramson, 2021).

Many people stay in deindustrialised places and do not necessarily have the skills to access better paid jobs. They experience worsening employment prospects and declining health. The locations where they stay also have worsening local finances, potentially affecting the quality of public services, including hospitals and schools (Beatty and Fothergill, 2016).

Is it any surprise, then, that frustration has taken root? Qualitative and quantitative evidence suggests that the combination of individual andlocal deprivation foments the populist vote worldwide. Indeed, it has been argued that it was ‘the places that don’t matter, not the people that don’t matter‘ which drove the result of the Brexit referendum in 2016 (Rodríguez-Pose, 2018).

Quantitatively, research shows that the localities hit hardest by austerity measures in the 2010s were more likely to vote to leave the EU (Fetzer, 2019). These places were predominantly former industrial centres, which had a lower tax base and high numbers of individuals claiming welfare benefits (Beatty and Fothergill, 2016). Economic change can bring with it political upheaval.

Lessons and conclusions

In the UK, industrial decline has had profound consequences in terms of economic inactivity, health and discontent. Britain’s stark geographical inequality is deep-rooted, having taken hold during the second half of the 20^th century, accelerating in the 1980s before being compounded by the global financial crisis of 2007-09. The loss of industry jobs – which were not replaced by new ones or alleviated through improved access to other opportunities – has scarred health and brewed discontent across generations.

Industrialisation significantly improved standards of living over the long run. But to get there, a significant health toll was paid during the early 19^th century by those who spun the wheels of the revolution in overcrowded and unsanitary cities (Voth, 2004). And over 100 years later, those who worked in the waning industrial heartlands, as well as their descendants, are also bearing the cost of economic change.

Many of the studies cited in this article focus on the shrinkage of the coal industry, because it was a sharp and highly localised event. In the case of coal, those who lost their jobs were given limited protections.

But other sectors show that deindustrialisation does not inevitably cause such long-term harm. Looking at dockworkers, who lost their jobs en masse with ‘containerisation’ in the 1960s, research shows that there was not any long-term impact on employment, unemployment, sick leave or mortality – perhaps thanks to the long-lasting guarantees from redundancy that were negotiated by trade unions (El-Sahli and Upward, 2017).

This smoother transition held firm even after the guarantees were lifted in 1989, which suggests that employment protections can mitigate the long-term costs of deindustrialisation rather than merely delaying them, as detractors may claim.