Local Labor Markets and the Persistence of Population Shocks

29 Pages Posted: 23 Oct 2017

See all articles by Sebastian Braun

Sebastian Braun

Kiel Institute for the World Economy - IFW

Anica Kramer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); Ruhr Universität Bochum

Michael Kvasnicka

RWI Essen (Berlin Office)

Abstract

This paper studies the persistence of a large, unexpected, and regionally very unevenly distributed population shock, the inflow of eight million ethnic Germans from Eastern Europe to West Germany after World War II. Using detailed census data from 1939 to 1970, we show that the shock had a persistent effect on the distribution of population within local labor markets, but only a temporary effect on the distribution between labor markets. These results suggest that locational fundamentals determine population patterns across but not within local labor markets, and they can help to explain why previous studies on the persistence of population shocks reached such different conclusions.

Keywords: population shock, locational fundamentals, agglomeration economies, regional migration, postwar Germany

JEL Classification: J61, R12, R23, N34

Suggested Citation

Braun, Sebastian Till and Kramer, Anica and Kvasnicka, Michael, Local Labor Markets and the Persistence of Population Shocks. IZA Discussion Paper No. 11077. Available at SSRN: https://ssrn.com/abstract=3056615

Sebastian Till Braun (Contact Author)

Kiel Institute for the World Economy - IFW ( email )

United States

Anica Kramer

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Ruhr Universität Bochum ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Michael Kvasnicka

RWI Essen (Berlin Office) ( email )

Hohenzollernstr. 1-3
Berlin, 45128
Germany

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