A labor market area is a geographic area or region defined for purposes of compiling, reporting, and evaluating employment, unemployment, workforce availability, and related topics. It can be defined as an economically integrated region within which residents can find jobs within a reasonable commuting distance or can change their employment without changing their place of residence.
Commuting flows are a primary consideration in defining and delineating labor market areas. The extent to which workers are willing and able to commute between two places indicates the degree of economic integration between those places.
United States
In the United States, the Bureau of Labor Statistics (BLS) maintains standard definitions of labor market areas for the purpose of standardization and to promote comparability of the labor force information used by various government programs. Definitions are updated annually, and the entire system of definitions is reevaluated once each decade based on decennial census data. BLS uses metropolitan and micropolitan statistical areas, including metropolitan divisions, as its principal basis for defining labor market areas. In New England, labor market area definitions are based on New England city and town areas rather than the county-based statistical areas used in other parts of the country. For geographic areas outside of metropolitan and micropolitan statistical areas, the BLS identifies labor market areas based primarily on commuting data, with a requirement that all components of a labor market area be contiguous.