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Demographic Transition and Firm Performance: An Empirical Analysis for Germany

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Modelling Aging and Migration Effects on Spatial Labor Markets

Part of the book series: Advances in Spatial Science ((ADVSPATIAL))

Abstract

Germany is expected to decline in terms of population in the next few decades. In the transition period, the working-age population will shrink faster than the share of pensioners. This phenomena, the “demographic change”, puts pressure on the welfare system and therefore, strategies are requested to face the demographic process. Strategies discussed in the political and scientific debate are the exhausting of the labor force that is available, e.g. employment of females and older workers, and immigration. We consider these channels and its impact on firm productivity using comprehensive German firm-level data. Our evidence suggests that such channels are not harmful for the firm but there is also no strong positive relationship. Thus, at least the channels considered may contribute to the reduction of the burden of the demographic transition.

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Notes

  1. 1.

    http://data.worldbank.org/indicator/SP.DYN.TFRT.IN (Accessed on August 28th 2016).

  2. 2.

    Accessed on August 29th 2016.

  3. 3.

    Statistisches Bundesamt, “Arbeitsmarkt auf einen Blick—Deutschland und Europa”, 2016. https://www.destatis.de/DE/Publikationen/Thematisch/Arbeitsmarkt/Erwerbstaetige/BroeschuereArbeitsmarktBlick0010022169004.pdf (accessed on September 15th 2016).

  4. 4.

    To define high- versus low-skilled we follow the approach by Trax et al. (2015) and Brunow and Blien (2015) that assigns occupations to ‘low-skilled’ and ‘high-skilled’ on the basis of 2-digit occupations using cluster analysis. The following variables are used in the cluster analysis: The proportion of time spent in non-routine and analytical work and the share of employees holding a University degree.

  5. 5.

    As a robustness check, we also re-estimated the models clustering the errors by industry. The results are almost identical with only a slight increase in standard errors.

  6. 6.

    If policy makers aim is to increase the employment of prime-aged workers from 9.7 % (which is the sample mean) to 15%, for example, then the reduction of GVA per employee is approximately 0.69 € at the sample mean of GVA per employee (which is 158.69 €).

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Author information

Authors and Affiliations

  1. Institute for Employment Research IAB, Nuremberg, Germany

    Stephan Brunow

  2. University of Applied Labour Studies, Schwerin, Germany

    Stephan Brunow

  3. The Ohio State University, Columbus, USA

    Alessandra Faggian

  4. Gran Sasso Science Institute, L’Aquila, Italy

    Alessandra Faggian

Authors
  1. Stephan Brunow
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  2. Alessandra Faggian
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Corresponding author

Correspondence to Stephan Brunow .

Editor information

Editors and Affiliations

  1. Schar School of Policy and Government, Arlington, VA, USA

    Roger R. Stough

  2. KTH Royal Institute of Technology, Stockholm, Sweden

    Karima Kourtit

  3. JADS (Jheronimus Academy of Data Science), ’s-Hertogenbosch, The Netherlands

    Peter Nijkamp

  4. Institute for Employment Research (IAB), Nuremberg, Germany

    Uwe Blien

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Brunow, S., Faggian, A. (2018). Demographic Transition and Firm Performance: An Empirical Analysis for Germany. In: R. Stough, R., Kourtit, K., Nijkamp, P., Blien, U. (eds) Modelling Aging and Migration Effects on Spatial Labor Markets. Advances in Spatial Science. Springer, Cham. https://doi.org/10.1007/978-3-319-68563-2_10

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