Abstract

All forecasts of labour force potential indicate that - for demographic reasons - Germany will face a strong decline in labour supply. Even nowadays, vacancy duration is remarkably longer and separation rates are remarkably lower than a decade ago. Employment growth as well as certainly GDP growth may reach a natural limit. In the long run, they can no longer serve as suitable indicators of prosperity, welfare, or the financial basis of social security. However, due to missing experience with developped but shrinking economies in the past, it is a challenge to identify adjustment strategies and consequences for the labour market. This is why we collect a new historical data set over a time span of 140 years. It comprises data on population, employment and unemployment, wages, GDP and the investment ratio in various countries. The international and long time series allow to identify phases of negative population growth or at least population growth below average. For these phases, we may show whether and which reactions took place at which dynamics. This includes technical adjustment as well as adjustment on the labour market, via wages as a shortage indicator, for example.