Functional Regions: Local Labour Market Areas in Italy Giovanni Barbieri, Sandro Cruciani, Francesca Gambarotto NESIS Seminar June 26th, 2003

Functional regions in Italy 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) 26 June 2003 Functional regions in Italy

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 26 June 2003 Functional regions in Italy

Functional regions in Italy 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 26 June 2003 Functional regions in Italy

Functional regions in Italy 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 26 June 2003 Functional regions in Italy

Functional regions in Italy LLMAs (1991) 26 June 2003 Functional regions in Italy

Functional regions in Italy 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 26 June 2003 Functional regions in Italy

Functional regions in Italy Clusters 26 June 2003 Functional regions in Italy

Functional regions in Italy Non- specialized 26 June 2003 Functional regions in Italy

Functional regions in Italy Non-manu- facturing 26 June 2003 Functional regions in Italy

Functional regions in Italy Light manu- facturing 26 June 2003 Functional regions in Italy

Functional regions in Italy Other manu- facturing 26 June 2003 Functional regions in Italy

Main Features of Clusters 26 June 2003 Functional regions in Italy

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) 26 June 2003 Functional regions in Italy

Per capita Value added (2000) 26 June 2003 Functional regions in Italy

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 26 June 2003 Functional regions in Italy

Employment Rate Dynamics by Macro-Region 26 June 2003 Functional regions in Italy

Functional regions in Italy The Derived Tassonomy 26 June 2003 Functional regions in Italy

Functional regions in Italy LLMAs Performance 26 June 2003 Functional regions in Italy

Functional regions in Italy 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 26 June 2003 Functional regions in Italy

Socio-Demographic Features Population density Masculinity rate Dependence rate Turnover of working population Average dimension of households Education rates 26 June 2003 Functional regions in Italy

Functional regions in Italy Dwellings Share of occupied dwellings Rooms per dweller Average number of rooms Ownership Time of construction Services Water WC and bathroom Central heating 26 June 2003 Functional regions in Italy

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 26 June 2003 Functional regions in Italy

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 26 June 2003 Functional regions in Italy

The Results: A Few Examples 26 June 2003 Functional regions in Italy

Functional regions in Italy Population 26 June 2003 Functional regions in Italy

Functional regions in Italy Density 26 June 2003 Functional regions in Italy

Functional regions in Italy Dependence Rate 26 June 2003 Functional regions in Italy

Functional regions in Italy Education Rate (1991) 26 June 2003 Functional regions in Italy

Functional regions in Italy And so on… 26 June 2003 Functional regions in Italy

Functional regions in Italy 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 26 June 2003 Functional regions in Italy

Functional regions in Italy 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? 26 June 2003 Functional regions in Italy