Major Issues in Regional Labour Market Analysis

Abstract

Although there is a substantial body of literature on labour market analysis, most of it ignores the spatial dimension of the labour market. A spatial perspective in analyzing labour market processes is important for several reasons (see Fischer, 1986). First, labour markets are by no means as homogeneous as conventional labour market theories assume. In reality, labour markets are segmented by firm, industry, job type, worker type, occupation and - last but not least - spatial location. In other words, the macro pattern of labour market segmentation is reflected in a spatial segmentation. For instance, weak spatial labour markets are characterized by a high concentration of problem groups on the labour market as well as by a tendency to structural unemployment. The fact that labour markets are spatially segmented raises also important policy issues. Second, most countries are displaying strong spatial variations in the dynamics of unemployment. Certain regions (e. g., peripheral ones, old industrial areas and increasingly also inner cities) are more seriously suffering from unemployment problems than others. There are spatial inequalities, not only in terms of unemployment rates, but also in the range of quality of jobs available. The poor spatial coordination of labour supply and labour demand has recently become an important policy issue (see Clark, 1983b). Third, geographical space exerts a frictional effect on labour market adjustment processes.