Estimating Regional Industry Employment from Economic Location Mechanisms: A Constrained Spatial Disaggregation for European Geographies

Fine-scale employment by industry is largely unavailable across European municipalities, yet it underpins regional economic analysis, environmental-economic extensions, and the regionalization of input--output accounts. This paper presents a mechanism-driven, constrained spatial disaggregation framework that estimates industry employment down to the Local Administrative Unit level while preserving official totals exactly at every geographical level. The economic mechanisms that shape where activity locates --- settlement, infrastructure and accessibility, natural-resource endowments, and inter-industry co-location --- are represented as a reproducible input dataset assembled from official and remote-sensing sources; a family of constrained allocation models, combined by a cross-validated convex ensemble, is trained on data-rich United States geographies and transferred to Europe under official Eurostat totals as constraints. Validated against independent national statistics in Italy, France, Germany, and Spain, the estimates reproduce the observed spatial distribution of employment within the held-out uncertainty of the models themselves, and the error does not inflate down the four-step disaggregation. The framework is open, inspectable, and reproducible, providing internally consistent fine-scale employment estimates wherever sub-national industry data are sparse.