Elke Amend, Norbert Schanne, IAB, Nürnberg, Germany
Regional labour markets in Germany – a comparative perspective (assigned to theme
Considering regional disparities within Germany, one typically expects the largest disparities to show up between east and west, and it is true that despite substantial transfer payments the “Neue Länder” have not been able to catch up. However, a second look at a more disaggregated level reveals considerable differences within both parts of the country, and even within federal states. Our analysis focuses on the labour market performance, measured by employment growth, of regional units at different levels of aggregation. The empirical model, an econometric equivalent to the shift-share technique, confirms the role of structural elements in explaining the observed regional pattern of employment growth: industry structure, firm size, and qualification. It further identifies the different impacts of regional wages. Finally, we find a systematic effect at the local level that is not captured by the other variables in the model: regions seem to benefit (suffer) from persistently favourable (adverse) conditions, suggesting that regions are, to some extent, independent of the influences of economic variables commonly considered relevant for their development.
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