An Analytical Regions Proposal for the Study of Labour MarketsAn Evaluation for the Spanish Territory

Resumen

Internal homogeneity and also heterogeneity between the regions are both desirable properties for a better understanding of the local labor markets and for increasing the efficiency of any industrial policy applied at local level. However, studies of the labor markets that include a spatial dimension are commonly limited to administrative rather than appropriately-defined functional regions. Using micro data from the latest Census available, the Spanish territory can be divided into functional regions that emphasize the importance of location and agglomeration economies (size). The objective of this paper is to prove that, when studying labor economic issues, such classification based on economic criteria results on more convenient regions than the administrative ones commonly used (NUTS regions). Based on this simple idea, the results from this study suggest that, subject to the availability of data, this alternative spatial division should be considered when carrying out labor economics studies at a sub-national level.