Journal Article

Aging and regional productivity growth in Germany

Authors

  • Eckhardt Bode
  • Dirk Dohse
  • Ulrich Stolzenburg
Publication Date

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.

Kiel Institute Experts

Info

JEL Classification
E24; J11; J24; J26; R11
DOI
10.1007/s10037-023-00188-3

Key Words

  • Germany
  • Population aging
  • productivity growth
  • regional analysis
  • workforce aging