Demographic Ageing and the Polarization of Regions - An Exploratory Space-Time Analysis

Abstract

Demographic ageing is expected to affect labour markets in very different ways on a regional scale. Contributing to this debate, we explore the spatio-temporal patterns of recent distributional changes in the worker age structure and innovation output for German regions by conducting an Exploratory Space-Time Data Analysis (ESTDA). Besides commonly used tools, we apply newly developed approaches which allow investigating joint dynamics of the spatial distributions. Overall, we find that innovation hubs tend to be located in areas with high skill concentrations, but also seem to coincide with favourable demographic age structures. We show that these concentrations are persistent over time due to clusterwise path dependence and spatial contagion forces. The spatio-temporal patterns speak in favour of a demographic polarization process of German regions where the post-reunification East-West divide is increasingly turning into a rural-urban divide.

Keywords: innovation, demographic ageing, exploratory space-time analysis, regional disparities, spatial polarization

JEL Classification: J11, O31, R11, R12, R23