Introduction to labour market areas
In delivering labour market policies and careers guidance and
advice, it is important to know the geography of the economy - how
far and wide people will search for employment and employers will
look for workers. This is especially true for those in lower paid
jobs and occupations where the relative costs of commuting and
arranging caring, education and training impact on how wide an area
can be considered for paid work. At the other end of the job
spectrum, the size of the travel to work area will be larger but
probably focused on a major city or town as many professional jobs
will be located in the core of the region.
This spatial dimension to the labour market has been captured by
various terms and concepts over the years including employment
exchange areas, travel-to-work areas, local labour market areas,
etc. These have often informed and influenced policy according to
their respective properties and characteristics, and particularly
with regard to how labour market areas are defined and used in
practice. So, for example, whilst in the past the careers service
has been contained within arbitrary local authority and local
enterprise company areas, now with more fluidity and diversity in
the search areas of workers and employers, there is a greater
appreciation of the need for support and guidance structures to
match this flexibility and variation.
City-regions as Functional Economic Market Areas (FEMAs)
and Travel-to-Work Areas (TTWAs)
However, the definitions of such geographical areas are often
not agreed or are inconsistent, leading to confusion in terms of
economic analysis and policy prescription. To address this,
functional economic market areas (FEMAs) have been seen as the most
suitable geographies for economic analysis and policymaking. In the
English skills strategy, Skills for Growth[1], the
strategy-setting powers of the Manchester and Leeds city-region
pilots are discussed with reference to labour market areas. It was
argued[2] that FEMAs should be the
basis for defining these city-regions, and suggested that
Travel-to-Work-Areas (TTWAs) be used as the definition for FEMAs.
Plans for the replacements of the English Regional Development
Agencies, local enterprise partnerships (LEPs), also embed the idea
of FEMAs based on TTWAs as the preferred form of delivering
sub-regional economic development support[3].
Despite the apparent objectivity of this approach, there are
compromises and fuzziness at the margins in implementing this
process as it involves aggregating: 'individual-level data to
local authority-level averages, and then aggregate[s] these to
TTWA-level using postcode shares. Local Authority District (LAD)
boundaries are not congruent with TTWA boundaries, so
straightforward aggregation is not possible'[4]
This vagueness round the edges is also demonstrated when the UK
Government advisors who propose this approach refer to TTWAs and
city-regions as 'urban areas' and local economies' - these various
forms have overlapping and competing definitions and that means
service areas for SDS staff and others will be determined on
criteria that leave gaps, overlaps and perhaps shadow areas between
regions. Given the significance and central role being given to
city-regions, including in Scotland, this Spotlight looks at the
implications of using TTWAs to determine their boundaries,
influence and cohesion, and so assesses their role as the framework
for economic and labour market analysis, policy and practice at the
local level.
Scottish City-regions
The idea of 'city-regions', and in particular the idea of
monocentric metropolitan areas, seems to align well with Scotland's
geography based on the four historical cities plus Inverness, Perth
and Stirling[5]. And as in England,
these will be defined using TTWAs as vehicles for the
administration, development and implementation of economic
policy.
City-Regions are the enlarged
territories from which core urban areas draw people for work and
services such as shopping, education, health, leisure and
entertainment. The City-Region is a functional entity within which
business and services operate. City-regional economies play a
strong role in driving forward the economies of their regions.[6]
However, there is this vagueness in the public pronouncements on
the definitions of city regions:
The city-regional scale reflects
the 'geography of everyday life' rather than administrative
boundaries and presents us with opportunities to develop policy
that reflect and support the functioning of that City-Region.[7]
In the case of Scotland, the 'Review of Scotland's Cities' in
2002 made similar arguments:
Raising employment rates is an
important possibility for cities but so also are mobility, defined
as moves within TTWAs, and migration, including intra-Scotland
moves, moves within Britain and international migration. We have to
be clear about what we want for Scotland and how ambitious we want
our cities to be. For there are feasible potential strategies for
Scotland's cities to compete for human capital and they need to be
addressed soon.[8]
And they continue:
Transport within the City and
the City-Region. The available evidence points to a significant
increase in most of the city travel-to-work catchment
areas over the last decade (emphasis added).
This approach is based on the idea of a large metropolitan city
at the core of a dependent hinterland and means TTWAs are seen
exclusively in terms of those who commute into the city. Critically
this neglects such issues as the extent to which the workers within
the geographical area are employed in that same geography and vice
versa. Further, it suggests that it is 'important that our
city-regions operate as effective transport networks' confirming
the view that commuting to work is a leading measure of spatial
labour markets. Also it is reported that:
Glasgow, Aberdeen and especially
Dundee have seen significant increases in inward commuting. The
high absolute level of inward commuting for Glasgow may be because,
unlike the other 3 cities, Glasgow is effectively the central core
of a wider contiguous urban conurbation. Edinburgh's relatively
stable share of inward commuting is striking, but as we shall see
below, may reflect Edinburgh's relative success in partly
accommodating the city's expanding employment, by increasing
population within the city boundary.
Previous Generations
So there is a loose use here of these concepts of 'city
regions', 'inward commuting areas', 'travel-to-work catchment
areas', as well as 'TTWAs' and a practice of seeing them as
interchangeable. And most applications presume a core city with a
dependent labour market around it, which is not necessarily
inevitable or unchallenged. The city regions identified and bounded
in the Scottish report were derived from the 'City Region
Boundaries Study'[9], which
aimed:
- To identify the area of influence of each of the four cities of
Edinburgh, Glasgow, Dundee and Aberdeen using data covering housing
market areas, transport links, travel-to-work and retail
catchments; and
- To identify the local authorities that could participate in
joint working on strategic planning for each city region.
They generated maps (Figure 1) to show the
travel-to-work boundaries for each city within which more than 10%
of the resident population work in the city. As travel-to-work
areas have changed very substantially since the early 1990s for
Glasgow, Edinburgh and Dundee, though not for Aberdeen, this
confirms that there are no simple means to define such boundaries.
That is: there are no uncomplicated nor unchanging means to define
TTWAs uniquely or universally across occupations, genders, time,
etc. In 1991 there were relatively few travel-to-work trips beyond
the current Structure Plan areas, but there are now many areas
outwith the Plan coverage with more than 10% of the population
travelling to the city, and these patterns will have evolved
further by the time of the 2011 Census. For Edinburgh this includes
much of south Fife and the northern Scottish Borders, and for
Glasgow includes parts of Stirlingshire and Ayrshire. Conducting
this analysis with 2011 census data will produce a different set of
maps, with each iteration reducing Scotland to fewer and larger
city-regions.
Figure 1: Travel-to-work Areas for the 4 Scottish
cities
Source: Halden, 2002
This approach to the city region boundaries also involved a
mapping for the housing market areas, travel-to-work areas and
retail catchments, which were then combined to develop indicative
composite catchments for the cities. As in England, there
has been a strong tendency to work with existing administrative
boundaries, in particular local authority areas, so that in
practice in both Scotland and England - whether supported by
multiple analyses of housing, labour, business network and retail
areas or only TTWAs - city-region boundaries are based on Council
areas. These are used as the best feasible approximations to TTWAs.
It is argued this approach 'does ensure that each Council's stake
in the functioning of the major cities is defined' and, was
subsequently embedded into the strategic planning map of the four
metropolitan regions in Scotland [10]. It
offers a formalisation of the decision making roles of these
councils and the, now, historical Scottish Enterprise Local
Enterprise Companies (LECs) with the responsibility for the
implications of their collective decisions. So, although the set of
exercises generates a feasible map of TTWAs, these are then
modified in practice by using local authority and other agency
boundaries to define the relevant city-regions. This created issues
when LECs straddled boundaries, especially for the communities
in-between or on the margins.
The main driver which pervades almost all the official analyses
and promotion of city-regions based on TTWAs is the competitiveness
agenda: agglomeration economies and the skilled and professional
labour markets are the focus for determining the aggregation of
labour market areas. This raises problems for delivering services
and support for other occupations which are more local in their
needs. City-region wide schemes for the inactive and low skilled
make less sense where their search patterns and effective
opportunities are limited by costs, childcare and other
considerations. For many agencies involved in labour market and
skills interventions and for the SDS programmes and policies, not
least careers guidance, the best geographical area for delivery
needs to be much narrower than the city-region and yet adopting a
city-region approach can mis-specify their market.
Summary
In coming months we will stand on the brink of the initial
release of the 2011 Census data and proposals for Scottish city-
regions based on TTWAs. From the above, there will be a need to
consider the implications for skills interventions of these policy
developments. It has been argued above that, although the process
is put forward as a scientific procedure, the reality is somewhat
less objective. In creating city-regions as functional economic
market areas to pursue a competitiveness agenda and realise
agglomeration economies of scale and scope, travel-to-work-areas
are generated as best approximations. However, these are partial by
definition as they are biased towards estimates of the commuting
patterns of higher paid workers. This is compounded further by
aggregating local authority areas to approximate the TTWAs and so
their respective city-regions.
With all these degrees of approximations, the regional
operational areas for services, policies and programmes of Skills
Development Scotland (SDS) and other agencies could be
re-orientated to a geography that may not be consistent with
meeting the needs of many of its primary client groups - the
unemployed, school-leavers, women returners and others
disadvantaged in the labour market. There may be opportunities for
trading off the wider societal and economic benefits of
city-regions as metropolitan areas with significant agglomeration
economies against the costs of constructing an effective
infrastructure to deliver support and active labour market projects
for these groups. The application of city-region geographies in
England have often left communities and old industrial towns and
mining villages within their hinterlands in the shadows of their
core cities, progressively losing jobs and young people and without
the powers to intervene in the policy making or delivery processes.
As Scotland already has a highly concentrated government and
governance structure, with the fewest relative number of
sub-national elected authorities of any region or nation in Europe,
ensuring that national bodies - and SDS especially - have the
appropriate means and facilities locally to include all is an
imperative for the coming years. Greater inequality and poverty
will be the outcome otherwise as experiences from the English
city-regions demonstrate.
Professor Mike Danson
Professor in Scottish and Regional Economics
Business School
University of the West of Scotland
Professor Mike Danson is a specialist in regional economics and
policy development, publishing widely in the area. With a specific
expertise in regional economic development, he is a recognised
expert in regional development agencies and their programmes and
policies.
[1] BiS (2009), Skills for Growth:
The National Skills Strategy. BiS: London.
[2] DCLG (Department of Communities
and Local Government) (2010), Functional Economic Market Areas: an
economic note, DCLG: London.
[3] BiS and DCLG (2010)
Understanding Local Growth, Economic Paper no.7. BiS: London.
[4] Nathan, M. (2011) 'The Long
Term Impacts of Migration in British Cities: Diversity, Wages,
Employment and Prices', SERC DISCUSSION PAPER 67, LSE.
[5] Scottish Enterprise (2007)
Metropolitan Regions, Glasgow.
[6] DCLG (Department of Communities
and Local Government) (2007) State of the Cities: Summary.
Accessed on 2/09/07 at
http://www.communities.gov.uk/publications/citiesandregions/state2
and now preserved in the National
Archives. Department of Communities and Local Government:
London.
[7] DCLG, 2007, op cit.
[8] Scottish Executive (2002)
Review of Scotland's Cities - The Analysis, Edinburgh.
[9] Halden, D. (2002) 'City
Region Boundaries Study', Development Department Research
Findings No.146, Scottish Executive Central Research Unit, http://www.scotland.gov.uk/Publications/2002/08/15224/9743
[10] Scottish Enterprise, 2007,
op cit.