What has caused regional employment growth differences in Eastern Germany?
Using a regression analogue of the shift-share technique we address the explanatory power of various theories about regional differences in employment growth in eastern German districts from 1993 until 2001. We find that overly high regional wages are more important than differences in the qualification, firm-size or industrial structures. The most important source of disparities, however, is the dispersion of idiosyncratic location effects. This suggests that individual districts differ markedly in their capacity to generate employment growth and illustrates the importance of a regional perspective when it comes to the employment problem in eastern Germany in general. Copyright Springer-Verlag 2006
Volume (Year): 26 (2006)
Issue (Month): 1 (March)
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