Employment growth in German regions

Abstract

"Common trends in regional employment growth in Germany as well as the large disparities between its regions have been analyzed extensively. Nevertheless, most of these studies do not consider the reciprocal relationship between regions. Recent developments in spatial econometrics provide the means to account for this. We combine the idea of a shift-share regression (as weighted regression under constraints as used by Blien & Wolf 2002) with a spatial autoregressive model for panel data and use this to estimate the impact of various determinants on regional employment growth. The augmented shift-share regression allows to decompose the growth rate into structural and region specific components. The data are taken from the Federal Employment Agency and include employment covered by social security aggregated by industry at NUTS-3 level for the period from 1998 to 2004. Explanatory variables describe the qualification of the labor force, firm structure and the concentration of industries. The estimated impact of some structural variables changes substantially under consideration of spatial dependence, emphasizing the importance of spatial autocorrelation models." (Author's abstract, IAB-Doku) ((en))

Cite article

Schanne, N. (2006): Employment growth in German regions. A spatial econometric approach. Prepared for Spatial Econometrics Workshop, Rome 2006. 17 p.