Commuting Zones in Japan

         
Author Name ADACHI Daisuke (Yale University) / FUKAI Taiyo (University of Tokyo) / KAWAGUCHI Daiji (University of Tokyo and IZA) / SAITO Yukiko (Senior Fellow, RIETI)
Creation Date/NO. March 2020 20-E-021
Research Project Dynamics of Inter-organizational Network and Firm Lifecycle
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Abstract

We construct Commuting Zones (CZs) in Japan using the commuting patterns observed in the quinquennial Population Census between 1980 and 2015. CZs are geographical units which are created by integration of municipalities. Municipalities are not good geographical units to capture labor market because many workers commute to different municipalities, while prefectures include more than one labor market. CZs are created so that they are not over-integrated and the ratio of commuting within the same unit is high. In particular, we employ a hierarchical agglomerative clustering method popularized by Tolbert and Sizer (1996), which is used for delineating the standard CZs in the US. For example, from 2366 municipalities in the year 2005, we delineate 331 CZs that are mutually exclusive and completely exhaustive. We show the effectiveness of CZs in extracting heterogeneities of economic variables in analyzing labor markets. CZs functions well for implementing a large variety of geographical analysis.