The aim of this paper is to examine the coherence between and within functional as well as administrative regions in a labour market context. The larger the coherence of the local labour markets within the delimited regions, the larger the heterogeneity between the delimited regions is expected to be for particular measures related to the economy and the labour market. Contrary to previous delimitation studies we test for labour market coherence. The functionally defined regions are compared with the administratively defined regions with respect to four economic indicators: (i) income level; (ii) housing prices; (iii) employment rate, and (iv) unemployment rate. It turns out that the administrative delimitation of the Netherlands performs, on average, equally well as the functional delimitation. The hypothesis that the municipalities within the administratively defined regions show less coherence than the municipalities within the functionally delimited regions, cannot be rejected. We find some minor evidence that the coherence is greater for the average income level of municipalities within functional regions than within administrative regions. It can be concluded that there is not much to be gained in labour market policies by using functional instead of administrative divisions of regional labour markets. Therefore we doubt the usefulness of other studies on functional delimitations of labour market regions. Finally, our results imply that it may be better for regional labour market policies not to use a highly differentiated division of regions for such a small country as the Netherlands.
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Paper provided by Maastricht : ROA, Research Centre for Education and the Labour Market in its series Research Memoranda with number
002.
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