Business and Industry | Employment Concentration Levels
This research project proposes a new metric to define employment centers: geographical
employment concentration levels (GECL). GECL considers both employment density (employment/land
area) and intensity (employment/population), and may have advantages over other
measures. For example, measuring employment concentration using density alone creates
arbitrary clusters and may miss smaller geographic areas with high employment concentrations.
Measuring intensity alone inaccurately identifies centers with large areas of land
as high concentration areas.
Only three variables are needed to calculate GECL for a given area: employment level;
approximate population; and land area. The GECL measure is a percentage: areas are
classified as low, below average, average, above average, and high employment concentration
centers. Given that employment concentration levels differ geographically and change
periodically, GECL should help urban planners and decision makers in solving traffic
and crime problems as well as in real estate development decisions, among others.
GECL is constructed such that it uses periodically published data. Detailed geographical
regional employment and population data are available by census tract, city, county,
and MSA from U.S. Census Bureau American FactFinder
and most state-published employment and demographic data at least for census years.
Only city, county, and MSA data are available annually, however.
Employment and population census data for the year 2000 belonging to 3,340 census
tracts from five counties in Southern California were used as a reference point
to create and implement ECL (see maps). These counties were assumed to have diverse
spectrum of employment levels suited to serve as a reference point to classify other
geographical economic areas at least in the U.S. Five maps at right show areas of
relatively higher GECL within all of Southern California, and for selected cities
of Burbank, Irvine, Los Angeles and Riverside. Only GECL levels > 0.5 are included
to keep the maps readable.
ECL was then used to trace changes in employment concentration levels between 1990
and 2000 in these four areas in Southern California (maps). The results suggest
that most census tracts with high employment concentration levels in those areas
experienced marginal declines between 1990 and 2000. Gains in employment concentration
levels were mostly at the peripheries of the cities analyzed. ECL was then used
to capture annual changes in employment concentration levels in the four areas.
The computed changes reflected the impact of the real estate market boom in the
early 2000s and problems by 2007.
Contributors: Mak Kaboudan is a Professor of Business at the University of Redlands