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Nuts about NUTS!

Anyone not familiar with regional policy or regional statistics always gets a bit of a laugh when we start talking about NUTS. It actually stands for Nomenclature of Territorial Units for Statistics (NUTS) and this system of defining territorial units for statistics across the EU was created by Eurostat. The NUTS classification got legal status in 2003.

The concept of NUTS is that each country in the EU is divided into different territorial areas at descending levels. So in the case of Ireland, the country as a whole is classified as NUTS Level 1, this is then broken into a number of large regions which are NUTS Level 2 (or NUTS2), these are further broken into smaller regions which are NUTS Level 3 (or NUTS3) and then local authority areas are below that (called LAU, or Local Administrative Unit).

In 2003, when the NUTS categories were introduced, Ireland was divided into two NUTS2 regions – the Southern & Eastern region and the Border, Midland & West region (called the BMW which also raised a few laughs). These two larger regions were further sub-divided into eight smaller NUTS3 regions.

When the 2014 Local Government Act was introduced, which made a number of changes to administrative boundaries in Ireland, the Government through the CSO applied to Eurostat to revise Ireland’s NUTS2 and NUTS3 statistical regions to match these new boundaries. The changes to the NUTS boundaries were given legal status in 2016.

The Labour Force Survey for Quarter 1 2018, published on 20 June, was the first time that the CSO published regional statistics based on these new regional divisions. For the Labour Force Survey they published backdated data, using the new regional boundaries, back to 2012.

Much of the data published by the CSO does not include any regional breakdown, but gradually the CSO will begin to apply the new regional classification to data which it does publish on a regional basis. One of the most anticipated will be the County Incomes and Regional GDP data which we have blogged about previously.

What are the new NUTS?

Instead of two NUTS2 regions, Ireland is now divided into three NUTS2 regions. These correspond to the areas covered by the three Regional Assemblies established under the 2014 Act – Northern & Western, Southern, Eastern & Midland . In the Map below these are coloured in blue, red/orange and green respectively.

Each of these three NUTS2 regions is composed of groups of NUTS3 regions, shown by different shades in map below. The main changes at NUTS3 level are the transfer of South Tipperary from the South-East NUTS3 region into the Mid-West NUTS3 region (following the amalgamation of North and South Tipperary Councils) and the movement of Louth from the Border NUTS3 region to the Mid-East NUTS3 region.

 

Map of new NUTS2 and NUTS3 regions in Ireland. Louth and Tipperary are cross-hatched to indicate their move from one NUTS3 region to another. Source: Reverb Studios/NWRA https://blog.reverbstudios.ie/2016/04/27/ireland-regions-map-vector/

 

The new structure is:

NUTS2 Northern & Western composed of NUTS3 West (Galway, Mayo, Roscommon) and NUTS3 Border (Donegal, Sligo, Leitrim, Cavan, Monaghan)

NUTS2 Southern composed of NUTS3 Mid-West (Clare, Limerick, Tipperary), NUTS3 South East (Wexford, Waterford, Carlow, Kilkenny) and NUTS3 South West (Cork, Kerry)

NUTS2 Eastern & Midland composed of NUTS3 Dublin, NUTS3 Mid-East (Wicklow, Kildare, Meath, Louth) and NUTS3 Midlands (Offaly, Laois, Westmeath, Longford).

The CSO has published an Information Note on the revisions.

Implications

The introduction of the new regional statistical areas has a number of implications. As the three Regional Assemblies are responsible for developing and implementing new Regional Spatial & Economic Strategies (to give effect to the National Planning Framework at regional level), having access to official statistics which align with this regional structure will be invaluable in the finalisation of the RSES and their ongoing monitoring.

As the three NUTS2 regions are now smaller than the previous two NUTS2 regions it may be easier to identify and understand differences and comparisons among the regions. Some statistics are only published at the NUTS2 level, such as expenditure on Research & Development, and previously interpretation of this data was somewhat meaningless given the huge disparity between the BMW region (with one university) and the Southern & Eastern region (with all the others). The three new regions may provide additional insights.

At the same time, looking at the NUTS2 level can hide very considerable inter-regional differences probably most apparent in the Eastern & Midland region. The latest Labour Force Survey showed an unemployment rate of 5.3% in Dublin compared with 8% in the Midland region. This highlights the value of analysis at the NUTS3 regional level.

The movement of county Louth from the Border NUTS3 region to the Mid-East NUTS3 region is probably the most significant change. Given Louth’s location on the Dublin-Belfast corridor and its key role within Dublin’s catchment, it always made sense to include it, along with Wicklow, Kildare and Meath, as part of the Greater Dublin Area, however statistically this was not possible as it was included in the Border region which stretched across to Donegal. Louth’s inclusion in the Border region made this one of the most heterogeneous NUTS3 regions, and its statistics among the most difficult to interpret at times. It will be interesting to see the impact of Louth’s move on both regions.

Pauline White

Educational attainment in the Western Region

A recently published ESRI Research Bulletin, ‘The local factors that affect where new businesses are set up’ summarises their analysis of new firms setting up in Ireland. Data from the Department of Business, Enterprise and Innovation (DBEI) on the number of start-up firms each year in 190 localities, all outside of the Greater Dublin Area, is linked to data on local characteristics thought to be important to business location. This data is used to develop models of how much each factor (or combination of factors) contributes to the number of business start-ups in a given place and time.

The authors state that the results of this analysis show that

‘Educational attainment of local residents is highly attractive to start-ups; we use the share of the population with a third-level qualification as an indicator for this, and it has the largest effect of the factors in our models.’

The analysis also shows that broadband access is a significant factor

‘However, a key finding is that broadband’s effect on start-ups depends on the education level of an area’s population. Only areas with enough highly qualified staff seem to enjoy a boost in start-ups when they have broadband network access.’

This analysis clearly points to the importance of human capital in the location decision of new business start-ups. Of course the direction of causality is a challenge, new businesses are attracted to areas with a highly skilled population, but highly skilled people will only remain/move to an area if suitable job opportunities exist.

The latest WDC Insights, published by the WDC last week (27 March), ‘Census 2016: Education Levels in the Western Region’ is therefore very timely, as it examines the level of educational attainment of the adult population of the Western Region and its seven counties.

Highest level of education completed

Overall, the Western Region displays a lower educational profile, with a smaller share of its adult population (aged 15+ years and who have ceased education) having third level qualifications and a greater share having low levels of education (Fig. 1) than the rest of the state. 13.4% of adults in the Western Region have only completed primary education compared with 11.1% in the rest of the state. The region’s older age profile contributes to this.

At the highest levels of education the difference between the Western Region and the rest of state is quite substantial e.g. 8.5% in the Western Region have a postgraduate degree/diploma compared with 11.7% in the rest of the state. Given the importance of third level education for business location and stimulating overall economic growth, this presents a challenge for the region.

Fig. 1: Percentage of population (aged 15+ years and whose full-time education has ceased) by the highest level of education completed in the Western Region and rest of state, 2016. Source: CSO, Census 2016 Profile 10 – Education, Skills and the Irish Language, Table EA003

Highest level of education completed in western counties

There are significant differences across western counties in the share of the population with a third level qualification (Fig. 2).  At 55.2%, Galway City has the second highest share of residents with a third level qualification (Advanced Certificate/Completed Apprenticeship and higher) in Ireland. It is behind Dún Laoghaire-Rathdown but ahead of Fingal, Dublin City and Kildare. Within the region, Galway County, Clare and Sligo have the next highest shares of third level graduates, illustrating a strong concentration around Galway / Limerick and also in Sligo, clearly showing the influence of larger urban centres.

Donegal has the highest share of its population with no formal education or primary only (21.9%) in the State, with Mayo, Leitrim and Roscommon next highest in the region. This is partly due to greater reliance on sectors traditionally associated with lower qualifications.

In general, the counties offering fewer graduate employment opportunities tend to have weaker educational profiles, with many of those with higher qualifications having left these areas. This presents a double challenge for such areas – the weaker educational profile makes it more difficult to attract new business start-ups, while the lack of suitable job opportunities makes the area less attractive to those with higher qualifications. Often in such areas, it is the public sector (education, health, public administration) which presents the most significant graduate employment opportunities. Stimulating greater demand for highly qualified staff among private enterprise in these areas, as well as supporting opportunities for self-employment is required.

Fig. 2: Percentage of population (aged 15+ years and whose full-time education has ceased) in western counties by highest level of education completed, 2016. Source: CSO, Census 2016 Profile 10 – Education, Skills and the Irish Language, Table EA003

Conclusion

Overall the Western Region continues to display a lower educational profile than the rest of the state. Given the key role of human capital in regional development, this is a significant challenge for the region and in particular more rural counties.  A number of factors including the region’s older age profile and its sectoral pattern of employment – smaller shares working in sectors which demand higher qualifications (e.g. professional services, ICT, finance) and more working in sectors traditionally characterised by lower qualifications (e.g. hospitality, agriculture) – strongly influence its educational profile.

Galway City shows a very different educational pattern however with the second highest share of third level graduates in Ireland. This is both cause and effect of its recent strong economic performance. The sectoral pattern of employment in Galway City differs from the rest of the Western Region with a high share working in ICT and medical devices manufacturing which demand higher qualifications, the presence of NUI Galway is another key contributor.

Download the latest WDC InsightsCensus 2016: Education Levels in the Western Region

 

Self-employment – What does the Census tell us?

Regular followers of the WDC Insights blog will know that self-employment is a topic we’ve examined a number of times before, drawing on Quarterly National Household Survey data.  However this can only tell us what is happening in the Western Region as a whole, not in the individual counties.

The publication of Census 2016 – Summary Results Part 2, included some initial data on labour force status including self-employment. Again, as mentioned in our previous post on Principal Economic Status, it must be remembered that the labour market definitions used in the QNHS and in the Census are different, so the figures are not directly comparable.  In the Census, self-employed are referred to as ‘Employer or own account worker’.

Share of self-employed in workforce 

In 2016, according to the Census, there were 61,107 employers or own account workers (self-employed) living in the Western Region. This was 18.3% of all working people in the region. As we’ve mentioned before, self-employment is a particularly important source of employment in the Western Region.

From Fig. 1 it is clear that there is a very strong spatial pattern to self-employment. The State average is that 15.6% of those in employment are employers/own account workers.  The cities are where this is least common. Only 10% or less of workers in Cork and Dublin cities are self-employed. Galway city is next lowest at 11.1% and shows a very different pattern to the rest of the Western Region.

Besides these three cities, it is the other Dublin local authority areas, counties in the Greater Dublin Area and the other two cities (Limerick and Waterford) which have the lowest incidence of self-employment. Indeed the 11 areas with the lowest share of self-employment are the five cities and the Mid-East.

Fig. 1: Percentage of all ‘at work’ who are employer/own account worker by county, 2016. Source: CSO, Census of Population 2016 – Summary Results Part 2, Table EZ003: http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=EZ003&PLanguage=0

 

At the other end of the spectrum are the most rural counties. Co Kerry has the highest share of self-employment nationally at 21.1%, followed by Leitrim (20.3%), Cavan (19.9%) and Roscommon (19.9%).  In total, five of the Western Region counties are in the top  ten in terms of share of self-employment, with Mayo (19.6%), Galway county (19.5%) and Clare (19.5%) also having almost 1 in 5 of their workers self-employed.

The strong spatial pattern of self-employment in Ireland is related to many factors but notably the sectoral and occupational pattern of employment. Agriculture is a major influence, with construction trades also having high shares of self-employed. These sectors play a more significant role in the economies of rural counties. The relative lack of alternative employment opportunities, especially in the more remote rural areas, means that more people choose (or are necessitated) to turn to the self-employment route.  The WDC will be conducting further analysis of the sectoral and occupational data from the Census and its link with employment status, over the coming months.

Change in the share self-employed

In every county in Ireland, a smaller share of the workforce was self-employed in 2016 compared with five years earlier.  The national average declined from 16.9% of workers to 15.6%, with a decline from 19.9% to 18.3% in the Western Region (Fig. 2).

Leitrim, Galway county, Roscommon, Mayo and Clare all had shares above 20% in 2011, with only Leitrim remaining over 20% by 2016.  Among the western counties, Sligo had the smallest change in the share self-employed, declining from 18.2% down to 18%. From Fig. 2 it is also clear how strongly Galway city differs from the rest of the region.

 

Fig. 2: Percentage of all ‘at work’ who are employer/own account worker in western counties, Western Region, State and Rest of State, 2011 and 2016. Source: CSO, Census of Population 2016 – Summary Results Part 2, Table EZ003: http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=EZ003&PLanguage=0

 

One of the key reasons for the declining share of self-employment in the inter-censal period is the recovery in the jobs market.  During the depth of the recession 2008-2011 employment declined hugely.  Self-employment was not quite as impacted as some people who lost their job turned to self-employment, existing employers and own account workers may have been able to sustain their own jobs while having to let to employees, and there was the continuation of the trend of some jobs becoming contract/self-employment that would previously have been employees. Therefore as overall job numbers fell, the relative importance of self-employment as a share of total employment remained strong. As the jobs recovery began from 2012 and more employment opportunities emerged, the relative importance of self-employment declined.

Change in numbers self-employed

From Fig. 3 it is clear that between 2011 and 2016 the number of employees grew far more strongly than the number of self-employed. Nationally the number of employees in 2016 was 12.9% higher than in 2011, whereas the number of self-employed was only 2.3% higher.  In the Western Region the number of self-employed actually declined in this period, down -1% while the number of employees grew by 9.8%.  It is notable that for both forms of employment, the Western Region’s performance was weaker than the State average and the Rest of State.  The decline in the numbers self-employed in the region is of some concern given its continuing greater significance in the labour market, especially in more rural counties (see Fig. 1 above).

 

Fig. 3: Percentage change in number of employer/own account workers in western counties, Western Region, State and Rest of State, 2011-2016. Source: CSO, Census of Population 2016 – Summary Results Part 2, Table EZ003: http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=EZ003&PLanguage=0

 

Across the region, Mayo, Galway county, Roscommon and Leitrim, the four counties where self-employment continues to play the largest role in their labour market (see Fig. 1) and the most rural, experienced declines in the actual number of people self-employed between 2011-2016.  All other western counties had some growth in the numbers self-employed with the strongest growth in Galway City (2.8%), which nevertheless continues to have a low share of self-employed.

In all cases the growth in self-employment was always substantially less than the growth in the number of employees.  The main exception to this was Sligo, which had very low growth in employees at only 2.6%. Indeed Sligo had the lowest growth in employee numbers in the State in this period.

Conclusion 

While the relative importance of self-employment within the labour market declined between 2011-2016, largely due to the strengthening jobs market, it remains a very significant form of employment. In the five most rural western counties of Leitrim, Roscommon, Mayo, Galway county Clare, 1 in 5 of those at work, work for themselves.  Nationally there is a very strong spatial pattern of higher rates of self-employment in rural counties, with the lowest shares in the cities and Mid-East.

Some of the region’s most rural counties experienced a decline in the numbers self-employed between 2011 and 2016, the underlying reasons for this will only be apparent when the sectoral and occupational pattern of employment change in these counties is explored.

 

 

Pauline White