IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v50y2018i8p870-890.html
   My bibliography  Save this article

Ageing shocks and short-run regional labour market dynamics in a spatial panel VAR approach

Author

Listed:
  • Timo Mitze
  • Torben Dall Schmidt
  • Daniel Rauhut
  • Aki Kangasharju

Abstract

Using a flexible spatial panel VAR model for a small-scale labour market system, we investigate the dynamic interdependences between changes in the demographic structure and the labour market performance of a regional economy. With a particular focus on ageing shocks, we describe an increase in the share of elderly in regional population due to exogenous changes in the institutional context, such as pension reforms. The regional labour market implications of an ageing shock are then tested with regard to the effects on employment growth, unemployment and labour participation rate. Our results based on a sample of 71 Scandinavian regions point to negative regional labour market effects of an ageing shock implying a reduction in employment growth and a temporarily declining labour participation rate, while the unemployment rate increases. Importantly, spatial spillovers amplify these negative impacts through a marginalization of macro-regional labour markets. As a robustness check, we reverse the causal ordering and analyze the responses to a positive macroeconomic shock which initially increases employment growth. We find direct and spatially indirect adjustment patterns characterized by a reduction of the unemployment rate, an increase in the labour participation rate and a decrease in the share of elderly in the population.

Suggested Citation

  • Timo Mitze & Torben Dall Schmidt & Daniel Rauhut & Aki Kangasharju, 2018. "Ageing shocks and short-run regional labour market dynamics in a spatial panel VAR approach," Applied Economics, Taylor & Francis Journals, vol. 50(8), pages 870-890, February.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:8:p:870-890
    DOI: 10.1080/00036846.2017.1346360
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2017.1346360
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2017.1346360?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Clarence D. Long, 1958. "The Labor Force under Changing Income and Employment," NBER Books, National Bureau of Economic Research, Inc, number long58-1, July.
    2. Kangas, Olli & Lundberg, Urban & Ploug, Niels, 2006. "Three routes to a pension reform. Politics and institutions in reforming pensions in Denmark, Finland and Sweden," Arbetsrapport 2006:10, Institute for Futures Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sven Wardenburg & Thomas Brenner, 2021. "Analysing the spatio-temporal diffusion of economic change - advanced statistical approach and exemplary application," Working Papers on Innovation and Space 2021-01, Philipps University Marburg, Department of Geography.
    2. Sven Wardenburg & Thomas Brenner, 2019. "The impact of place-based policies on perceived regional living conditions across German labor market regions. Examining the impacts on migration flows," Working Papers on Innovation and Space 2019-02, Philipps University Marburg, Department of Geography.
    3. Patricia Abelairas-Etxebarria & Inma Astorkiza, 2020. "Space-Time Analysis of Migrations, Employment, and Housing as A Basis for Municipal Sustainable Urban Planning," Sustainability, MDPI, vol. 12(6), pages 1-13, March.
    4. Boeing, Philipp & Eberle, Jonathan & Howell, Anthony, 2022. "The impact of China's R&D subsidies on R&D investment, technological upgrading and economic growth," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Jonathan Eberle & Thomas Brenner & Timo Mitze, 2020. "Public Research, Local Knowledge Transfer, and Regional Development: Insights from a Structural VAR Model," International Regional Science Review, , vol. 43(6), pages 555-586, November.
    6. Eberle, Jonathan & Böing, Philipp, 2019. "Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces," ZEW Discussion Papers 19-038, ZEW - Leibniz Centre for European Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ken-Ichi Watanabe, 1982. "An Adaptation of Weintraub’s Model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 5(2), pages 228-245, December.
    2. C. Lee, 1998. "Life Cycle Savings in the United States, 1900-1990," CPE working papers 0014, University of Chicago - Centre for Population Economics.
    3. Chad Turner & Robert Tamura & Sean Mulholland & Scott Baier, 2007. "Education and income of the states of the United States: 1840–2000," Journal of Economic Growth, Springer, vol. 12(2), pages 101-158, June.
    4. Arthur Kraft, 1973. "Preference Orderings As Determinants Of The Labor Force Behavior Of Married Women," Economic Inquiry, Western Economic Association International, vol. 11(3), pages 270-284, September.
    5. Ayhan, Sinem H., 2015. "Evidence of Added Worker Effect from the 2008 Economic Crisis," IZA Discussion Papers 8937, Institute of Labor Economics (IZA).
    6. Pedro Nuno Teixeira, 2011. "A reluctant founding father: Placing Jacob Mincer in the history of (labor) economics," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 18(5), pages 673-695, December.
    7. Ondřej Dvouletý & Martin Lukeš & Mihaela Vancea, 2020. "Individual-level and family background determinants of young adults’ unemployment in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(2), pages 389-409, May.
    8. Julie L. Hotchkiss & M. Melinda Pitts & John C. Robertson, 2008. "The Push-Pull Effects of the Information Technology Boom and Bust," Economic Development Quarterly, , vol. 22(3), pages 200-212, August.
    9. T. Aldrich Finegan & Robert A. Margo, 1993. "Added and Discouraged Workers in the Late 1930s: A Re-Examination," NBER Historical Working Papers 0045, National Bureau of Economic Research, Inc.
    10. Deshpande, Ashwini, 2020. "The COVID-19 Pandemic and Gendered Division of Paid and Unpaid Work: Evidence from India," IZA Discussion Papers 13815, Institute of Labor Economics (IZA).
    11. Reuben Gronau, 2003. "Jacob Mincer and Labor Supply–Before and Aftermath," Review of Economics of the Household, Springer, vol. 1(4), pages 319-329, December.
    12. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2020. "Labor supply and the business cycle: The “bandwagon worker effect”," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1607-1642, December.
    13. Ayhan, Sinem H., 2014. "How Do Married Women Respond When Their Husbands Lose Their Jobs? Evidence from Turkey During the Recent Crisis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100387, Verein für Socialpolitik / German Economic Association.
    14. Sherwin Rosen, 1992. "Distinguished Fellow: Mincering Labor Economics," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 157-170, Spring.
    15. Claudia Goldin, 1994. "Labor Markets in the Twentieth Century," NBER Historical Working Papers 0058, National Bureau of Economic Research, Inc.
    16. Sebnem Kalemli-Ozcan & David Weil, 2010. "Mortality change, the uncertainty effect, and retirement," Journal of Economic Growth, Springer, vol. 15(1), pages 65-91, March.
    17. Roger Baer, 1972. "Male labor force participation revisited," Demography, Springer;Population Association of America (PAA), vol. 9(4), pages 635-653, November.
    18. Lersch, Philipp M. & Schulz, Wiebke & Leckie, George, 2020. "The Variability of Occupational Attainment: How Prestige Trajectories Diversified within Birth Cohorts over the Twentieth Century," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 85(6), pages 1084-1116.
    19. Maridueña-Larrea, Ángel & Martín-Román, Ángel L., 2023. "The asymmetric cyclical behaviour of female labour force participation in Latin America," MPRA Paper 117408, University Library of Munich, Germany.
    20. Benati, Luca, 2001. "Some empirical evidence on the 'discouraged worker' effect," Economics Letters, Elsevier, vol. 70(3), pages 387-395, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:50:y:2018:i:8:p:870-890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.