Interaction of Regional Population and Employment

Arbeitspapier

We investigate the interaction of regional population and employment in a simu1taneousmodel, allowing for interregional commuting. The proposed dynamic specificationdistinguishes between short-run and equilibrium adjustment effects and it encompassesthe lagged-adjustment specification that is standard in the literature. We interpret thelong-run relationship between levels of population and employment as a labour marketequilibrium. The model is estimated on a panel of 1973-2000 annual data for 40regions in The Netherlands, controlling for region and time-specific heterogeneity.Identification of the model is improved by decomposing population growth into netinterregional migration and exogenous natural popu1ation developments. We find thatemployment growth responds quite strongly to deviations from regional labour marketequilibria. Net migration is dominated by housing market developments and in the shortrun on1y slightly affected by increases in regional employment. The main implication isthat equilibrium on regional labour markets is obtained through adjustment ofemployment instead of population. We test and reject the lagged-adjustmentspecification.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 04-083/3

Classification and Topics

• Classification: Wirtschaft ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics ; Labor Demand
• Subject: simultaneous model of regional population and employment ; migration ; regional labour markets ; lagged adjustment dynamics ; Regionale Bevölkerungsentwicklung ; Regionaler Arbeitsmarkt ; Binnenwanderung ; Anpassung ; Niederlande

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vermeulen, Wouter ; van Ommeren, Jos
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/86340
• Last update: 10.03.2025, 11:41 AM CET