Demography and unemployment in East Germany: How close are the ties?

Arbeitspapier

We analyze the relation between population aging and the decline of unemployment in East Germany for the years from 1996 to 2012. To this we scrutinize both a direct and an indirect effect of aging on unemployment. The direct effect includes a decomposition of the East German unemployment rate into three components considering changes in the workforce's age structure, labor market participation, and age-specific unemployment rates. Results show that changes in the age structure of the workforce counteracted unemployment decline since 2005. Spatial panel regressions on the small-scale regional level, however, point towards an indirect effect of aging on unemployment that works through the increasing competition for labor. Overall results show that the declining unemployment rate in East Germany is indeed affected by aging as evidenced by a declining youth share and an increasing old-age share. This indicates that a reversed cohort crowding effect has taken place.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAB-Discussion Paper ; No. 26/2014

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Demographic Trends, Macroeconomic Effects, and Forecasts ; Unemployment: Models, Duration, Incidence, and Job Search ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
• Subject: unemployment ; demographic change ; cohort crowding ; spatial panel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fuchs, Michaela ; Weyh, Antje
• Event: Veröffentlichung
• (who): Institut für Arbeitsmarkt- und Berufsforschung (IAB)
• (where): Nürnberg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/108833
• Last update: 10.03.2025, 11:42 AM CET