Aging and regional productivity growth in Germany

Eckhardt Bode, Dirk Dohse and Ulrich Stolzenburg

Open Access Publications from Kiel Institute for the World Economy from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We investigate the effects of aging on regional productivity growth, the mechanisms and the strength of which are not well-understood. We focus on two different manifestations of population aging—workforce aging and an increasing share of retirees—and investigate channels through which aging may impact on regional productivity growth for a panel of German counties 2000–2019. We find that workforce aging is more negatively associated with productivity growth in urban than in nonurban regions. A likely reason is that aging is detrimental to innovative and knowledge-intensive activities, which are heavily concentrated in cities. We also find a negative association between the share of the retired population and productivity growth in regions with a small household services sector. A likely reason is that older people’s disproportionate demand for local household services (including health care, recreation) requires a re-allocation of resources from more productive manufacturing or business services to less productive household services. Regions specialized more in highly productive industries have more to lose in this process.

Keywords: Workforce aging; Population aging; Productivity growth; Regional analysis; Germany (search for similar items in EconPapers)
JEL-codes: E24 J11 J24 J26 R11 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-age, nep-eec, nep-eff, nep-geo, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Aging and regional productivity growth in Germany (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkie:273315

DOI: 10.1007/s10037-023-00188-3

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