Geographers at Newcastle University developed a method for defining labour market areas (LMAs) used by the UK’s Office for National Statics (ONS) to produce official statistical boundaries. The Newcastle method has delivered policy in geographical contexts ranging from rural Ireland to industrial Italy.
Issue
Good spatial policy decisions depend upon analyses of data for appropriately defined areas. The appropriate areas for economic development policy are ‘functional economic areas’, such as labour market areas (LMAs).
Approach
Since the 1960s, UK official statistics and regional policy have used LMA boundaries called TTWAs (Travel to Work Areas).
A radical methodological review by the Newcastle team in 2007 devised a new and iterative procedure to define TTWAs. This replaced the long-established approach to regionalisation, in which each LMA needs a single urban core, with a flexible method that reflects the new mobility of the labour force. The Newcastle method identifies any substantial cluster of commuting flows, whether it is urban, rural or multi-centred, as a valid LMA.
Impact
Urban-centred functional definitions only take account of commuting flows into larger cities from surrounding areas. In contrast, The Newcastle method considers flows in all directions, resulting in a more holistic approach that covers an entire country, from metropolitan areas to remote rural regions.
The Newcastle method for defining LMAs was recognised as best practice at an international scale. Until 2020, neither Eurostat nor the OECD had recommended a method of defining LMAs to their member states, who together cover most of the world’s economic activity. In their 2020 report, Eurostat concluded that the Newcastle method enabled countries beyond the UK to define appropriate LMAs, and that using the same method in other countries would enable a harmonised system across the continent.
In 2015, Italy’s national statistical institute, Istat, used the method to define the Italian LMAs, known as Sistemi Locali. These have since had a range of policy uses, for example analysing the geographical factors contributing to the uneven impact of the COVID-19 pandemic across Italy.
More information
Institution: Newcastle University
Researcher: Professor Mike Coombes