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Aging and regional productivity growth in Germany

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  • Bode, Eckhardt
  • Dohse, Dirk
  • Stolzenburg, Ulrich

Abstract

We investigate the effects of aging on regional productivity growth, the mechanisms and the strength of which are not well-understood. We focus on two different manifestations of population aging—workforce aging and an increasing share of retirees—and investigate channels through which aging may impact on regional productivity growth for a panel of German counties 2000–2019. We find that workforce aging is more negatively associated with productivity growth in urban than in nonurban regions. A likely reason is that aging is detrimental to innovative and knowledge-intensive activities, which are heavily concentrated in cities. We also find a negative association between the share of the retired population and productivity growth in regions with a small household services sector. A likely reason is that older people’s disproportionate demand for local household services (including health care, recreation) requires a re-allocation of resources from more productive manufacturing or business services to less productive household services. Regions specialized more in highly productive industries have more to lose in this process.

Suggested Citation

  • Bode, Eckhardt & Dohse, Dirk & Stolzenburg, Ulrich, 2023. "Aging and regional productivity growth in Germany," Open Access Publications from Kiel Institute for the World Economy 273315, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:273315
    DOI: 10.1007/s10037-023-00188-3
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    Cited by:

    1. Stephan Brunow & Ramona Jost, 2023. "Being a long distance out-commuter or home employee in a rather peripheral region evidence of a German federal state," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(2), pages 317-342, August.

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    More about this item

    Keywords

    Workforce aging; Population aging; Productivity growth; Regional analysis; Germany;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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