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New analysis: London’s most deprived neighbourhoods have been hardest hit by unemployment

Author: WPI Economics

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Analysis from our economics partner WPI Economics finds that the most deprived areas in London prior to the COVID-19 crisis have seen the largest increases in claims of unemployment benefits.

It is now well-documented that COVID-19 has disproportionately affected London’s poorest communities. In July, we published an analysis which explored the link between deprivation and mortality. It demonstrated that, even after accounting for a range of other relevant neighbourhood characteristics, the most deprived 20% of neighbourhoods in London have seen, on average, 23 more COVID-19 deaths per 100,000 than the least deprived 20% of neighbourhoods.

Today we are updating an analysis which considers an economic dimension of COVID-19; the link between deprivation and recent rises in unemployment. To do this we looked at how the proportion of people claiming unemployment benefits has increased over the last year for neighbourhoods across London. We then assessed how this relates to the relative level of deprivation in each area.

The results mirror other recent findings at a national scale; showing that the most deprived areas in London prior to the Covid-19 crisis have seen the largest increases in claims of unemployment benefits.

Specifically, the most deprived 10% of London neighbourhoods have seen their rate of claims for unemployment benefit rise by around 7 percentage points, some 2.8 times that experienced by the least deprived 10% of neighbourhoods (that saw a 2.5 percentage point increase).

Change in unemployment benefit claim rate, October 2019 - October 2020, by neighbourhood deprivation deciles (2019 - 2020)

We can also see how this looked when mapped across London. The graphic below shows a snapshot of this, and our online interactive map allows you to search and explore that data.

Claimant count change and deprivation, October 2019 to October 2020, London

This provides more evidence which suggests that the health, economic and social impacts of COVID-19 could act to widen inequalities across the capital.

It is necessary to understand which communities across London are most affected by the health, social and economic consequences of COVID-19 in order to develop the most appropriate policy responses. Providing this information is at the heart of what we are trying to do with London’s Poverty Profile.