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Demographic Change and Regional Labour Markets: The Case of Eastern Germany

  • Beate Henschel
  • Carsten Pohl
  • Marcel Thum

Demographic change will be one of the most challenging issues for industrialized economies in the decades to come. In this paper, we focus on the impact of demographic change on labour markets. By setting up a stylized model of a regional labour market, we are able to analyze the interaction of labour demand and supply during demographic transitions. The simulation results for eastern Germany, a forerunner in the demographic process, show that the population decline will not help to reduce the currently high unemployment among the low-skilled dramatically. Among the high-skilled, scarcities will play a major role and could impede the development of industrial centers.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2315.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2315
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  1. Francesco Daveri & Mika Maliranta, 2007. "Age, seniority and labour costs: lessons from the Finnish IT revolution," Economic Policy, CEPR;CES;MSH, vol. 22, pages 117-175, 01.
  2. James Poterba, 2004. "The Impact of Population Aging on Financial Markets," NBER Working Papers 10851, National Bureau of Economic Research, Inc.
  3. Kahn, J. & Lim, J.S., 1997. "Skilled Labor-Augmenting Technical Progress in U.S. Manufacturing," RCER Working Papers 437, University of Rochester - Center for Economic Research (RCER).
  4. Miles, David K, 1997. "Modelling the Impact of Demographic Change Upon the Economy," CEPR Discussion Papers 1762, C.E.P.R. Discussion Papers.
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  6. James M. Poterba, 2001. "Demographic Structure And Asset Returns," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 565-584, November.
  7. Börsch-Supan, Axel & Ludwig, Alexander & Winter, Joachim, 2002. "Aging and International Capital Flows," Sonderforschungsbereich 504 Publications 02-27, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  8. Andrew B. Abel, 2001. "Will bequests attenuate the predicted meltdown in stock prices when baby boomers retire?," Working Papers 01-2, Federal Reserve Bank of Philadelphia.
  9. An, Chong-Bum & Jeon, Seung-Hoon, 2006. "Demographic change and economic growth: An inverted-U shape relationship," Economics Letters, Elsevier, vol. 92(3), pages 447-454, September.
  10. Axel Börsch-Supan, 2003. "Labor Market Effects of Population Aging," LABOUR, CEIS, vol. 17(SpecialIs), pages 5-44, 08.
  11. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  12. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
  13. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, 01.
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