Functional Regions: Local Labour Market Areas in Italy

Functional Regions: Local Labour Market Areas in Italy

Giovanni Barbieri, Sandro Cruciani, Francesca Gambarotto

NESIS Seminar

June 26th, 2003

26 June 2003 Functional regions in Italy 2

Aim of the Exercise To map out local development In Italy Using a very detailed territorial grid Over 25 years

(from the 1971 census to the 1996 intermediate census and beyond)


Relevance of the Exercise To explore new regional classification

systems To test it in the analysis of sub-national socio-

economic structures To spot trends based on past evolution


1. Territorial Grid Local Labour Market Areas (LLMAs)

Based on information on commuting between house and workplace across municipalities

Istat (1997). I sistemi locali del lavoro. Argomenti no. 10. Roma.

Features: Geographical: The grid of LLMAs covers the whole

territory of Italy, with no residuals Statistical: Transparent, internationally

acknowledged method Economic: LLMAs from an economic standpoint

approximate self-contained labour markets


The 1991 Grid The latest available territorial grid is used (based on

the results of the 1991 population census) LLMAs are 784 Kept constant over the whole 1971-1996 period.

Three reasons for this choice: Interest in dynamics The territorial grid itself is affected by growth processes Possible under-estimation of agglomeration


LLMAs(1991)


2. Clustering LLMAs Based on sectoral characteristics in the more recent

available industrial census (1996). Namely: The variable considered is employment in local units

(establishments) Industries are broken down in 51 classes The breakdown of manufacturing is more detailed The variable for each LLMA is obtained by aggregation

of municipal data


Clusters

N on- specia lized

U rban

M ining

Tourism

N on- m anufactu ring

M ade in I ta ly

Textiles

Leather

Eyew ear

L ight

Bu ild ing m ateria ls

Vehicles

Appliances

O ther

M anu facturing

LLMAs


Non-specialized


Non-manu-facturing


Light manu-facturing


Other manu-facturing


Main Features of Clusters

LLMAs Population CLUSTERS

Number % Million %

Non-specialized 311 39.7 12.9 22.4

Non-manufacturing 113 14.4 18.7 32.5

Light manufacturing 266 33.9 17.6 30.6

Other manufacturing 94 12.0 8.3 14.5

I taly 784 100.0 57.5 100.0


3. Classifying LLMAs according to employment rates

Ratio of this choice: in the absence of information on value added

produced in LLMAs, employment rate an indicator of their performance

In fact:

Value added at the LLMA level (1996-2000) has been recently published by Istat (June 17, 2003)

Population

PopWorkingAge

PopWorkingAge

Employment

Employment

GDP

Population

GDP


Per capita Value added(2000)


4. Employment Rate Dynamics 1971-1996

A way to introduce the concept of “successful” and “unsuccessful” LLMAs

From a technical point of view, this is done by considering the transition matrix comparing employment rates in 1971 and 1996

For a similar approach, see: OECD, Territorial Review of Italy, 2001


Employment Rate Dynamicsby Macro-Region

1991 Below the average Above the average

North-Centre 2 North-Centre 295 Mezzogiorno 135 Mezzogiorno 6

Above the average

I talia 137 I talia 301 North-Centre 41 North-Centre 81 Mezzogiorno 213 Mezzogiorno 11

19

71

Below the average

I talia 254 I talia 92


The Derived Tassonomy

1991 Below average Above average

Above average REGRESS LEADING

19

71

Below average LAGGING PROGRESS


LLMAsPerformance


The Data-Base Censuses 1971 through 1991, with updates

to 1996 where possible 5 main areas:

Socio-demographic features Dwellings Employment and labour market Economy and labour market Economy and production


Socio-Demographic Features

Population density Masculinity rate Dependence rate Turnover of working population Average dimension of households Education rates


Dwellings Share of occupied dwellings Rooms per dweller Average number of rooms Ownership Time of construction Services

Water WC and bathroom Central heating


Economy and Labour Market

Employed persons in local units, in total and by 8 sectors of activity

Average size of local units Localization quotients Specialization indexes


Economy and Production Activity rate (total and by sex) Employment rate (total and by sex) Share of employed persons by sector of

activity Share of employed persons by kind of

occupation (employee/self-employed) Entrepreneuriality rate


The Results: A Few Examples

Clusters Lagging Regress Progress Leading TotalNon specialized 168 82 18 43 311Non-manifacturing 46 6 21 40 113Light manufacturing 16 44 41 165 266Other manufacturing 24 5 12 53 94Italy 254 137 92 301 784

Clusters Lagging Regress Progress Leading TotalNon specialized 1,67 1,51 0,49 0,36 1,00Non-manifacturing 1,26 0,30 1,58 0,92 1,00Light manufacturing 0,19 0,95 1,31 1,62 1,00Other manufacturing 0,79 0,30 1,09 1,47 1,00Italy 1,00 1,00 1,00 1,00 1,00


Population




Density




Dependence Rate




Education Rate (1991)




And so on…


Preliminary results

Urban LLMAs seem to be the more successful Density is destiny

Diversity seems to be a key to success Overspecialisation not an advantage in the

long run


Next Steps Profiling successful and unsuccessful LLMAs Discriminant analysis How were characterized in 1971 the dynamic

LLMAs? Which problems face the various types of

clusters? Are there policy lessons to learn?

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Functional Regions: Local Labour Market Areas in Italy

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