Creating a New Geography of Functional Economic Regions to Analyse Aspects of Labour Market Performance in Australia

A new geography of Functional Economic Regions (FERs) has been created across the large metropolitan city regions and across the non-metropolitan areas of the nation. The demarcation of FRRs, which are formed on spatial building blocks known as SLAs (Statistical Local Areas), uses a methodology that optimises within-region self-containment of commuting to jobs. These new functional regions should provide a much improved geography for the analysis of aspects of labour market performance which has relied largely on using data for de jure regions - such as Statistical Divisions and Local Government Areas - for which census and other data are available on which much of the research involving the spatial econometric modelling of labour market performance in Australia has relied which are far from ideal for such analyses. The new national geography of FERs is described and this functional regional geography is then used to investigate aspects of regional labour market performance. It is demonstrated how the FER geography largely overcomes the spatial autocorrelation problem encountered in using de jure regions.