The Royal Poor Law Commission viewed outdoor relief as a rural institution, and most historians, myself included, have focused their analyses on poor relief in agricultural parishes. But outdoor relief also played an important role in the manufacturing cities of northwest England. Along with industrialization came business cycles and the problem of how to deal with cyclical fluctuations in the demand for industrial workers. Manufacturers used the Poor Law as an unemployment insurance system: Workers not needed during downturns were laid off or put on short time, and collected outdoor relief. Because a large share of the poor rate was paid by non-labor-hiring taxpayers, by laying off workers manufacturers were able to pass some of their labor costs on to others during downturns.

However, there was a problem with using the Poor Law as an unemployment insurance system. Parishes were obliged to relieve only those paupers who had their legal settlement in the parish. In the first half of the nineteenth century, 50% or more of the work force in most industrial cities had been born, and were legally settled, elsewhere. Industrial cities not only were under no obligation to relieve nonsettled workers, they had the right to send any nonsettled applicants for relief back to their parish of settlement. A city's policy concerning whether to remove or relieve nonsettled able-bodied applicants depended in part on the political power of its manufacturers. Manufacturers supported granting relief to nonsettled workers during downturns, to ensure that an adequate work force would be available upon the return of prosperity.