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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. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  2. Axel Börsch-Supan, 2003. "Labor Market Effects of Population Aging," LABOUR, CEIS, vol. 17(SpecialIs), pages 5-44, 08.
  3. Axel Börsch-Supan & Alexander Ludwig & Joachim Winter, 2002. "Aging and International Capital Flows," MEA discussion paper series 02010, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  4. James A. Kahn & Jong-Soo Lim, 1998. "Skilled labor-augmenting technical progress in U.S. manufacturing," Staff Reports 47, Federal Reserve Bank of New York.
  5. Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
  6. 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.
  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. Andrew B. Abel, 2001. "Will Bequests Attenuate The Predicted Meltdown In Stock Prices When Baby Boomers Retire?," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 589-595, November.
  9. 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.
  10. 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.
  11. James Poterba, 2004. "The Impact of Population Aging on Financial Markets," NBER Working Papers 10851, National Bureau of Economic Research, Inc.
  12. Fehr, Hans, 2000. " Pension Reform during the Demographic Transition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 419-43, June.
  13. 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.
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Cited by:
  1. 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.
  2. 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.

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