Urban Concentration, Agglomeration Economies and the Spatial Structure of Italian Local Labor Market Areas

This study investigates the evolution of local labor systems (1996-2005) in Italy by introducing an indicator of economic agglomeration (per-land value added) with the aim to identify changes in urban hierarchy. Factors promoting local competitiveness in a traditionally-divided country such as Italy were also identified based on a joint analysis of economic growth and population increase over time. The spatial distribution of per-land value added standardized by population density was studied using a Moran's index of spatial autocorrelation identifying urban clusters and economically-dynamic rural districts. An index of economic competitiveness based on the ratio of changes over time of per-land value added to population density was proposed with the aim to evaluate direction and intensity of variation in the Italian urban hierarchy. This index was finally contrasted with background socioeconomic variables characterizing local labor systems with the objective to propose a multivariate analysis of urban concentration and hierarchy based on multiple criteria and territorial attributes. The proposed index was found correlated with variables assessing the economic structure of labor markets during 1996-2000 and with territorial variables assessing socio-spatial issues, accessibility and settlement characteristics during 2001-2005. Per-land value added could differentiate local labor systems along urban-rural gradients, evidencing a marked north-south divide when standardized to population density. Results of this study candidate per-land value added as a reliable proxy of the (changing) urban hierarchy in a given country or region.