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Demographic change and regional labour markets

Author

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  • Michael J Böhm
  • Terry Gregory
  • Pamela Qendrai
  • Christian Siegel

Abstract

Like many other countries, Germany has experienced rapid population and workforce ageing, yet with substantial variation across regions. In this paper we first use this spatial variation between 1975 and 2014 to estimate quasi-causal supply effects of ageing on regional labour market outcomes, drawing on the identification strategy of Böhm and Siegel (2020). We find in our panel of German labour market regions that workforce mean age has considerable negative effects on the wage returns to age. We also obtain suggestive evidence that relative employment rates of older workers decline when mean age rises. A decomposition of the heterogeneous regional trends using our estimates shows that ageing of rural regions is mainly driven by supply (reflecting local population dynamics) whereas urban ageing is driven by demand (reflecting responses to economic conditions). We discuss the differential implications of these drivers for regional policy.

Suggested Citation

  • Michael J Böhm & Terry Gregory & Pamela Qendrai & Christian Siegel, 2021. "Demographic change and regional labour markets," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(1), pages 113-131.
    • Handle: RePEc:oup:oxford:v:37:y:2021:i:1:p:113-131.
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    File URL: http://hdl.handle.net/10.1093/oxrep/graa063
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    Cited by:

    1. Federico Barbiellini Amidei & Matteo Gomellini & Lorenzo Incoronato & Paolo Piselli, 2025. "Demographic Change and Entrepreneurship Across Regions: Long-Run Evidence from Italy," CSEF Working Papers 752, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Ming Gao & Fan Jiang & Jiwen Wang & Bi Wu, 2024. "Population ageing and income inequality in rural China: an 18-year analysis," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.

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    Keywords

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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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