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

2. 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)
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Functional regions in Italy

3. 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
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Functional regions in Italy

4. 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
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Functional regions in Italy

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

6. Functional regions in Italy
LLMAs (1991)
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Functional regions in Italy

7. 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
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Functional regions in Italy

8. Functional regions in Italy
Clusters
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9. Functional regions in Italy
Non- specialized
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10. Functional regions in Italy
Non-manu- facturing
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11. Functional regions in Italy
Light manu- facturing
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12. Functional regions in Italy
Other manu- facturing
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13. Main Features of Clusters
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14. 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 ( ) has been recently published by Istat (June 17, 2003)
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Functional regions in Italy

15. Per capita Value added (2000)
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16. 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
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Functional regions in Italy

17. Employment Rate Dynamics by Macro-Region
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18. Functional regions in Italy
The Derived Tassonomy
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19. Functional regions in Italy
LLMAs Performance
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20. 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
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Functional regions in Italy

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

22. 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
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Functional regions in Italy

23. 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
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Functional regions in Italy

24. 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
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25. The Results: A Few Examples
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26. Functional regions in Italy
Population
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27. Functional regions in Italy
Density
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28. Functional regions in Italy
Dependence Rate
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Functional regions in Italy

29. Functional regions in Italy
Education Rate (1991)
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30. Functional regions in Italy
And so on…
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31. 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
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32. 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?
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