Labour Market Areas in Italy: products for users and tool for policy Luisa Franconi Istat, Direzione centrale per lo sviluppo dei sistemi informativi e dei prodotti integrati, la gestione del patrimonio informativo e la valutazione della qualità, DCIQ Working Group on Regional, Urban and Rural Development Statistics meeting -- Eurostat, 19 October 2015

1.Labour Market Areas (LMAs) in Italy 2.Reasons to develop LMAs 3.Reasons to choose LMAs as a new geography to read the country 4.LMAs as a tool for policy 5.Conclusions 6.An invitation Plan

What are they?  LMAs are a partition of the country where the bulk of the population lives and works and where, therefore, tends to exercise most of its social and economic relationships Where do they come from?  Input data are commuting data from 2011 Population census When have they been released?  17 December 2014 How many are they ?  There are 611 LMAs in Italy in 2011 (there were 683 in 2001). LMA in Italy

How have they been built?  Eurostat Task force on harmonised LMAs stated principles and proposed a method  Analysis of Coombes and Bond (2007)  Istat has modified an algorithm developed by CBS in R to comply with the comments stemming from the Task Force  The result is the EU-ttwa algorithm  Currently it is a script in R but thanks to Eurostat grant we plan to produce an R package together with its documentation to be distributed freely LMAs in Italy

Why have they been built? 1. «historical reasons» To investigate labour markets i.e. a partition of the country where it does make sense to compare estimates on employment/unemployment To Identify Italian industrial districts 2. New products for users: LMA as a core geography for Italy LMAs as a geography to “read” the country LMA as a provider of new perspectives in terms of studies and analysis 3. LMAs as a powerful tool for policy Reasons to develop LMAs

 Since 2000 Istat produces estimates on employment and unemployment rate by LMAs based on small area estimation methods.  Labour force survey has a design that allows for estimates at NUTS3 level  LMAs are not a planned estimate domain and they cut across survey strata  Currently EBLUP based on a linear mixed model with spatially correlated area effects and coverage given by the area level unemployment rate at previous census and sex by age classes is used.  By November 2015 a revised model will be used based on current research carried out at Istat. 1. Investigate labour markets

 Industrial Districts (IDs) are LMAs that show particular concentration of small- medium size enterprises in the same NACE  Industrial Districts have been published in February 2015  They are 141 in 2011  The analysis of their economic specialization is made using the data on economic units surveyed in the 9 th Industry and Services Census.  Industrial districts represent about one- fourth of the Italian economic system, both in term of LMAs (23.1% of the total), workers (24.5% of the total) and local units (24.4% of the total). 1. Identify Industrial Districts

In its Annual Report 2015 Istat has started an extensive use of LMAs as a geography to interpret phenomena: Some example  socio-demographical characteristics based on censuses  Classification by prevailing product specialisation  New analyses based on integrated data  New analyses based on further characteristics of society and land … and start new investigation 2. LMAs as a geography to read the country

2. Socio-demographical characteristics of the LMAs 7 groups have been identified which are homogeneous w.r.t. demographical structure, population dynamics and the type of settlements

2. A new map of the Italian productive system 6 classes have been identified to classify the Italian productive system  texile, clothing and leather (60)  Other firms of the «made in Italy» (129)  Heavy manufacturing (85)  Urban LMA (91)  Non manifacturing (133)  Unspecialised (113)

2. Productivity and labour cost (source:Frame-Sbs) Added value by per person employed (productivity)Labour cost per employee

2. Export performance and dynamics of such performance Export by employed personDynamics of export performance

2. Land take Strong pressure on territories (compact settlements and urban sprawl) in 160 LMAs LMAs with high density of settlements having large areas (99 LMAs)

2. Regional cultural value The link between regional and cultural resources (the concept of soft-power):  Cultural and landscape heritage  productive/cultural Infrastructure  «La grande bellezza» «The great beauty» (70 LMAs, 8.1 % of the national surface, 38.1 % of the population) is characterised by excellence in both culture and landscape vocation

 A study of cities through LMAs geography 2. New perspective in types of analyses

 New releases as far as LMAs are concerned:  New products: a dashboard  Two e-books, one dedicated to LMA, the other to Industrial districts  A workshop dedicated to LMA: 6th November 2. New release

 The release of new types of integrated statistics will allow concrete identification of the areas where to concentrate investments  The regular release of such integrated statistics will allow better monitoring of the results of such investments 3. A tool for policy

Conclusions  Functional geographies are powerful tools to break down into meaningful regions the territory of a country  As LMAs are based on commuting they are able to interpret not only labour related events but also socio-demographic phenomena as the work represents a fundamental part of the life of people  LMA geography provide a different analysis of a phenomenon when compared to that stemming from administrative regions. Ecological fallacy is overcome and regions appear with their peculiarities and differences  LMA geography has also allowed to overcome the traditional statistics by sector, dimension and administrative regions (stove- pipes) and to present integrated statistics  The production of statistics at regular interval of time allows to use LMAs as to powerful tool for policy: it allows to identify the areas where to concentrate resources and to monitor changes in time

An invitation  Istat will take part in the grant program launched by Eurostat  We plan to document the whole process of LMAs creation  We plan to release an R package to produce LMA  We will provide two training courses for interested MSs (either in Italy or in another MS) where we will discuss the method used, share experience and share the methods we have used for small areas estimation, industrial district identification, release of statistics by LMAs,etc.  We would like to create a web site where interested MSs can upload their documents, papers, reports, softwares, links to their web-pages, in order to create a community of interested researchers that share views and experience on this subject  We invite you all to join us