Automatic delimitation of labour market areas based on multi-criteria optimisation: The case of Spain 2011

Labour market areas (LMAs) are a type of functional region (FR) defined on commuting flows and used in many countries to serve as the territorial reference for regional studies and policy making at local levels. Existing methods rely on manual adjustments of the results to ensure high quality, making them difficult to be monitored, hard to apply to different territories, and onerous to produce in terms of required work-hours. We propose an approach to automatise all stages of the delineation procedure and improve the final results, building upon a state-of-the-art stochastic search procedure that ensures optimal allocation of municipalities/counties to LMAs while keeping good global indicators: a pre-processing layer clusters adjoining municipalities with strong commuting flows to constrain the initial search space of the stochastic search, and a multi-criteria heuristic corrects common deficiencies that derive from global maximisation approaches or simple greedy heuristics. It produces high quality LMAs with optimal local characteristics. To demonstrate this methodology and assess the improvement achieved, we apply it to define LMAs in Spain based on the latest commuting data.