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The region of Madrid: Effects of agglomeration vs. centralisation

Listed author(s):
  • Carlos Iglesias Fernández
  • Raquel Llorente Heras
  • Diego Dueñas Fernández

Madrid is an atypical territory among the Spanish regions. In comparison with other areas, this region presents high labour activity rates (63.68 percent) and employment (59.7 percent) alongside low rates of unemployment (6.25 percent). However, this aggregated labour dynamism is not generalized to the whole region of Madrid, as important territorial differences exist. This paper offers an analysis of the territorial characteristics of the regional labour market in Madrid. With this motive in mind, we have developed the following two types of analysis: firstly, we classified the municipalities of Madrid based on labour indicators using alternative methodologies (two-step cluster and k-means procedure) that mainly demonstrate the existence of a dichotomising structure of the labour market associated with the presence of centralisation and agglomeration patterns; secondly, we developed several probability models (logits) that define and determine the previous territorial clusters showing important centralisation effects. This work establishes an interesting methodology which could be applied to other regions facilitating comparisons between regions. In addition, territory differentiation is necessary in order to deal with the future regional labour policy. The Region of Madrid can be used as a typical example of regional labour market centralisation.

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Paper provided by Instituto Universitario de Análisis Económico y Social in its series Working Papers with number 02/10.

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Length: 41 pages
Date of creation: Feb 2010
Handle: RePEc:uae:wpaper:0210
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  1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
  2. Leo Sveikauskas, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, Oxford University Press, vol. 89(3), pages 393-413.
  3. Wheaton, William C. & Lewis, Mark J., 2002. "Urban Wages and Labor Market Agglomeration," Journal of Urban Economics, Elsevier, vol. 51(3), pages 542-562, May.
  4. E. Paul Durrenberger, 2005. "Labour," Chapters,in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar Publishing.
  5. Christine Aumayr, 2006. "European Region Types: A Cluster Analysis of European NUTS 3 Regions," ERSA conference papers ersa06p836, European Regional Science Association.
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