Demographic Aging and Employment Dynamics in German Regions: Modeling Regional Heterogeneity

Thomas de Graaff*, Daniel Arribas-Bel, Ceren Ozgen

*Corresponding author for this work

Research output: Chapter in Book / Report / Conference proceedingChapterAcademicpeer-review

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Persistence of high youth unemployment and dismal labour market outcomes are imminent concerns for most European economies. The relationship between demographic ageing and employment outcomes is even more worrying once the relationship is scrutinized at the regional level. We focus on modelling regional heterogeneity. We argue that an average impact across regions is often not very useful, and that—conditional on the region’s characteristics—impacts may differ significantly. We advocate the use of modelling varying level and slope effects, and specifically to cluster them by the use of latent class or finite mixture models (FMMs). Moreover, in order to fully exploit the output from the FMM, we adopt self-organizing maps to understand the composition of the resulting segmentation and as a way to depict the underlying regional similarities that would otherwise be missed if a standard approach was adopted. We apply our proposed method to a case-study of Germany where we show that the regional impact of young age cohorts on the labor market is indeed very heterogeneous across regions and our results are robust against potential endogeneity bias.

Original languageEnglish
Title of host publicationModelling Aging and Migration Effects on Spatial Labor Markets
EditorsRoger R. Stough, Karima Kourtit, Peter Nijkamp, Uwe Blien
PublisherSpringer International Publishing Switzerland
Number of pages21
ISBN (Electronic)9783319685632
ISBN (Print)9783319685625
Publication statusPublished - 2018

Publication series

NameAdvances in Spatial Science
ISSN (Print)1430-9602
ISSN (Electronic)2197-9375


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