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Demographic Change and Regional Labour Markets: The Case of Eastern Germany

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  • Beate Henschel
  • Carsten Pohl
  • Marcel Thum

Abstract

Demographic change will be one of the most challenging issues for industrialized economies in the decades to come. In this paper, we focus on the impact of demographic change on labour markets. By setting up a stylized model of a regional labour market, we are able to analyze the interaction of labour demand and supply during demographic transitions. The simulation results for eastern Germany, a forerunner in the demographic process, show that the population decline will not help to reduce the currently high unemployment among the low-skilled dramatically. Among the high-skilled, scarcities will play a major role and could impede the development of industrial centers.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2315.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2315

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Related research

Keywords: demographic change; labour market; unemployment; long-run projection; general equilibrium;

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References

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  1. Andrew B. Abel, 2001. "Will Bequests Attenuate the Predicted Meltdown in Stock Prices When Baby Boomers Retire?," NBER Working Papers 8131, National Bureau of Economic Research, Inc.
  2. Axel Boersch-Supan & Alexander Ludwig & Joachim Winter, 2001. "Aging and International Capital Flows," NBER Working Papers 8553, National Bureau of Economic Research, Inc.
  3. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, 01.
  4. Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
  5. Kahn, J. & Lim, J.S., 1997. "Skilled Labor-Augmenting Technical Progress in U.S. Manufacturing," RCER Working Papers 437, University of Rochester - Center for Economic Research (RCER).
  6. An, Chong-Bum & Jeon, Seung-Hoon, 2006. "Demographic change and economic growth: An inverted-U shape relationship," Economics Letters, Elsevier, vol. 92(3), pages 447-454, September.
  7. James M. Poterba, 2001. "Demographic Structure And Asset Returns," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 565-584, November.
  8. Francesco Daveri & Mika Maliranta, 2007. "Age, seniority and labour costs: lessons from the Finnish IT revolution," Economic Policy, CEPR & CES & MSH, vol. 22, pages 117-175, 01.
  9. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  10. James M. Poterba, 2004. "The impact of population aging on financial markets," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 163-216.
  11. Axel Börsch-Supan, 2003. "Labor Market Effects of Population Aging," LABOUR, CEIS, vol. 17(SpecialIs), pages 5-44, 08.
  12. Fehr, Hans, 2000. " Pension Reform during the Demographic Transition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 419-43, June.
  13. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
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Cited by:
  1. Michael Berlemann & Marco Oestmann & Marcel Thum, 2014. "Demographic change and bank profitability: empirical evidence from German savings banks," Applied Economics, Taylor & Francis Journals, vol. 46(1), pages 79-94, January.
  2. Beate Grundig & Carsten Pohl, 2007. "Demographischer Wandel in Ostdeutschland: Fluch oder Segen für den Arbeitsmarkt?," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 14(03), pages 3-13, 06.

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