Local Governments in the Wake of Demographic Change: Evidence from German Municipalities
German municipalities are expected to suffer from intense demographic changes in the upcoming decades, not only in the form of population losses, but also through a changing demographic structure. We assess local governments' vulnerability to the fiscal consequences of these demographic transformations (using a sample of 1021 German municipalities) by determining the elasticity of local government cost functions to municipalities' demographic characteristics. Our findings indicate that smaller municipalities are especially vulnerable to increasing cost pressures. In the absence of increased higher-level government support, these findings would support a case for boundary reviews or more extensive intercommunal cooperation.
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Volume (Year): 64 (2008)
Issue (Month): 4 (December)
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References listed on IDEAS
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- Joel Mokyr, 2004. "Commentary : global demographic change : dimensions and economic significance," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 57-71.
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NBER Working Papers
10817, National Bureau of Economic Research, Inc.
- David E. Bloom & David Canning, 2004. "Global demographic change : dimensions and economic significance," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 9-56.
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- John Ashworth & Benny Geys & Bruno Heyndels, 2005. "Government Weakness and Local Public Debt Development in Flemish Municipalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 395-422, August.
- Tim Callen & Warwick J. McKibbin & Nicoletta Batini, 2006. "The Global Impact of Demographic Change," IMF Working Papers 06/9, International Monetary Fund.
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