Demographic Change and Regional Labour Markets

24 Pages Posted: 23 Nov 2020

See all articles by Michael J. Böhm

Michael J. Böhm

University of Bonn

Terry Gregory

IZA Institute of Labor Economics; ZEW – Leibniz Centre for European Economic Research

Pamela Qendrai

IZA

Christian Siegel

University of Kent

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Abstract

Like many other countries, Germany has experienced rapid population and workforce ageing, yet with substantial variation across regions. In this paper we first use this spatial variation between 1975 and 2014 to estimate quasi-causal supply effects of ageing on regional labour market outcomes, drawing on the identification strategy of Böhm and Siegel (2020). We find in our panel of German labour market regions that workforce mean age has considerable negative effects on the wage returns to age. We also obtain suggestive evidence that relative employment rates of older workers decline when mean age rises. A decomposition of the heterogeneous regional trends using our estimates shows that ageing of rural regions is mainly driven by supply (reflecting local population dynamics) whereas urban ageing is driven by demand (reflecting responses to economic conditions). We discuss the differential implications of these drivers for regional policy.

Keywords: ageing, demographic change, regional differences, wage returns to age

JEL Classification: J11, J31, R23

Suggested Citation

Böhm, Michael J. and Gregory, Terry and Qendrai, Pamela and Siegel, Christian, Demographic Change and Regional Labour Markets. IZA Discussion Paper No. 13883, Available at SSRN: https://ssrn.com/abstract=3734751

Michael J. Böhm (Contact Author)

University of Bonn ( email )

Adenauerallee 24-42
Institute for Applied Microeconomics
Bonn, NRW 53113
Germany
+49 228 73-9240 (Phone)

HOME PAGE: http://www.iame.uni-bonn.de/people/michael-boehm

Terry Gregory

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://https://sites.google.com/view/terrygregory

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
Mannheim, 68161
Germany

HOME PAGE: http://https://sites.google.com/view/terrygregory

Christian Siegel

University of Kent

CT2 7NP
United Kingdom

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