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Demographic Optimum in the Context of Migration. The German Case

Ion Pohoata (), Gabriel Căriman and Vladimir-Mihai Crupenschi
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Ion Pohoata: Alexandru Ioan Cuza University of Ia?i, Romania
Vladimir-Mihai Crupenschi: Alexandru Ioan Cuza University of Ia?i, Romania

The AMFITEATRU ECONOMIC journal, 2017, vol. 19, issue 46, 654

Abstract: The study aims to test whether the unbalanced structure of indigenous workforce offer in developed economies, such as Germany, originates both in the structure of rewards associated with each type of job in accordance with the required education level and also in the algorithm of their allocation so that the economy’s workforce demand is met. The structural disequilibrium of the workforce offer reflected in the scarcity of workforce members which have attained only a primary education level determines the need to supplement indigenous labour force by accepting and even encouraging immigration. The goal of using game theory as methodology is to estimate the strategy of player P1 (considered to be the individual agent) in choos ing a specific level of education, while taking into account the choices of future competitors on the labour market – associated in the game with collective player P2. The resulted Nash equilibrium leads to the conclusion that an individual player, to the extent of approximately 40%, chooses to pursue a superior level of education (tertiary), while more than 95% out of total competitors opt for a similar level of education. Therefore, any version of demographic optimum for Germany, built on the principle of economic efficiency cannot afford to ignore the contribution of immigrants towards achieving the required workforce level.

Keywords: demographic optimum; Nash equilibrium; migration. (search for similar items in EconPapers)
JEL-codes: C02 F22 F66 J11 O15 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:aes:amfeco:v:46:y:2017:i:19:p:654