Labour Markets Event: Key Points Continued

The last contribution came from Dr Patrick Watt, Head of Labour Market Research, SDS. His presentation, entitled “putting the local back into the local labour market,can be accessed here (p38-50).

Dr Watt’s presentation centred on reviewing some of the arguments for and against the use of Travel-to-Work-Areas (TTWAs) as approximations to local labour markets/ Functional Economic Market Areas (FEMAs). The key issue was to establish how the local labour market actually works at the local level and whether or not TTWAs are the most effective model in this regard?

Dr Watt argued that alternative approaches are more accurate approximations of local labour markets, one’s which focus on policy-driven geographies rather than data-driven ones. TTWAs continue to decline and are an “arbitrary approach”:

Just because it is the most sophisticated approach doesn’t make it relevant

How does the labour market work?

Dr Watt’s core argument here was to highlight that the differences between theory and practice are “most manifest at the local level”. Indeed, not only does the labour market operate in “un-market like ways” but key assumptions held by theoretical approaches are “difficult to sustain at the local level”.

Dr Watt concluded his contribution by calling for a rethink in how we approach labour markets (see p49 of slides for more details).

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Suggested Further reading

BiS (2009), Skills for Growth: The National Skills Strategy
BiS (2010), Understanding Local Growth
Communities and Local Government (2010), Functional Economic Market Areas: An economic note