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Are the Number of Skilled Workers Running Out in Germany? The (Non)-Consequences of Demographic Change

Author

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  • Alfred Garloff

    ()

  • Rüdiger Wapler

Abstract

Two stylised facts of the German labour market are that first, the demand for (high-)skilled labour has been growing rapidly for a number of years and second, the country is facing a particularly strong demographic change with the expected size of the population decreasing rapidly and the average age of the labour force increasing sharply. This has led to a widely discussed fear of ``labour-market shortages' whereby employers simply cannot find ``enough' workers because many more are retiring than younger cohorts are entering. Although there is a simple logic in this argument, it is not beyond doubt, because firstly it is neither clear whether the labour demand side could not counteract this effect nor secondly to which precise situation the description ``shortage' actually refers to. We address both issues from a theoretical and empirical perspective. We find no evidence that a high number of retirees across occupations leads to a higher demand for younger workers. Instead, to a large extent, retirees seem to be ``replaced', if they are replaced at all, by middle-aged cohorts who change occupations.

Suggested Citation

  • Alfred Garloff & Rüdiger Wapler, 2013. "Are the Number of Skilled Workers Running Out in Germany? The (Non)-Consequences of Demographic Change," ERSA conference papers ersa13p854, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa13p854
    as

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa13/ERSA2013_paper_00854.pdf
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    References listed on IDEAS

    as
    1. Alfred Garloff & Carsten Pohl & Norbert Schanne, 2013. "Do small labor market entry cohorts reduce unemployment?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(15), pages 379-406, September.
    2. Ay?egül ?ahin & Joseph Song & Giorgio Topa & Giovanni L. Violante, 2014. "Mismatch Unemployment," American Economic Review, American Economic Association, vol. 104(11), pages 3529-3564, November.
    3. Michael C. Burda & Jennifer Hunt, 2011. "What Explains the German Labor Market Miracle in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 273-335.
    4. Mahlberg, Bernhard & Freund, Inga & Crespo Cuaresma, Jesús & Prskawetz, Alexia, 2013. "Ageing, productivity and wages in Austria," Labour Economics, Elsevier, vol. 22(C), pages 5-15.
    5. Christoph Knoppik & Thomas Beissinger, 2009. "Downward nominal wage rigidity in Europe: an analysis of European micro data from the ECHP 1994–2001," Empirical Economics, Springer, vol. 36(2), pages 321-338, May.
    6. Willems, E. J. T. A. & de Grip, A., 1993. "Forecasting replacement demand by occupation and education," International Journal of Forecasting, Elsevier, vol. 9(2), pages 173-185, August.
    7. Robert Shimer, 2001. "The Impact of Young Workers on the Aggregate Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 969-1007.
    8. Prettner, Klaus & Bloom, David E. & Strulik, Holger, 2013. "Declining fertility and economic well-being: Do education and health ride to the rescue?," Labour Economics, Elsevier, vol. 22(C), pages 70-79.
    9. Skans, Oskar Nordstrom, 2005. "Age effects in Swedish local labor markets," Economics Letters, Elsevier, vol. 86(3), pages 419-426, March.
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    More about this item

    Keywords

    Labour-Market; Demography; Replacement Demand;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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