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Local Employment Growth in West Germany: A Dynamic Panel Approach

Author

Listed:
  • Blien, Uwe

    (Institute for Employment Research (IAB), Nuremberg)

  • Suedekum, Jens

    (Heinrich Heine University Düsseldorf)

  • Wolf, Katja

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

In this paper we study the dynamics of local employment growth in West Germany from 1980 to 2001. Using dynamic panel techniques, we analyse the timing of the impact of diversity and specialisation, as well as of the human capital structure of local industries. Diversity has a positive effect on employment growth in the short run, which is stronger in manufacturing than in services. Concerning specialization we find evidence for mean reversion, which is inconsistent with the idea that growth emphasizes itself. But there is considerable inertia in this process. A positive effect of education is only found in manufacturing. Additionally, we look at the impact of firm size and regional wages on local employment growth.

Suggested Citation

  • Blien, Uwe & Suedekum, Jens & Wolf, Katja, 2005. "Local Employment Growth in West Germany: A Dynamic Panel Approach," IZA Discussion Papers 1723, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1723
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    More about this item

    Keywords

    externalities; egional labour markets; urbanization and localization effects; local employment growth; dynamic panel estimation;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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