Development of the potential number of persons in employment in Saarland up to the year 2020 with a forecast to 2050 : methods, assumptions and basic data

Abstract

"Whereas projections for the regional labour demand have been developed by the regional network of the IAB for a while, comparable regional differentiated projection of the labour supply are available for West and East Germany each, but not on a deeper regional level up to now. The reasons are both data problems and capacity restrictions. Therefore, this article discusses, whether it might be possible using a simplified approach to estimate the potential labour force for single German Federal 'Länder'. Our approach was tested for the Saarland. A typical forecast of the labour supply is based upon two elements: a projection of the population and an estimate of future activity rates. For the population projection of the Saarland the '11th coordinated population projection', calculated by the German Federal Statistical Offices and the Statistical Offices of the Länder, was taken. The second element, the estimation and projection of labour participation rates in the Saarland, was in the focus of this article. These estimations were based on projections, which were calculated by the IAB for West Germany. Due to the concept of the potential labour supply, there should be no substantial difference in (potential) activity rates of the Saarland and West Germany, if unemployment were on the same level - all other influences kept constant. Our estimations show that there will be in fact no significant difference in potential labour participation, if the influence of the unemployment rate is taken into account. For that reason, we conclude that it is possible to use those potential activity rates, which are projected for West Germany, for the Saarland as well. Based on the population projection of the Statistical Offices for the Saarland and the IAB-forecast of the labour participation for West Germany, the labour force potential of the Saarland will moderately decline up to 2020. But this process accelerates enormously. Especially from 2020 onwards it gains on strength, driven by low birth rates and an ageing baby-boom generation. The labour force potential of the Saarland will shrink even a little more than the West German is assumed to. Demography will also shift the age structure of the labour force potential in the Saarland. Whereas the 40- to 49-year-olds is the strongest age-group today, in 2020 the numerically biggest age group will be the 50- to 59-year-olds. All in all, the demographic trend is the most important influencing factor on labour supply. The analyses show that neither high net migration flows nor increasing female labour participation rates respectively an extension of the working life (old-age pensions with 67) will be able to stop the trend." (Authors' abstract, IAB-Doku) ((en))

Cite article

Fuchs, J., Mai, R., Micheel, F., Otto, A., Weber, B. & Göttner, D. (2009): Entwicklung des saarländischen Erwerbspersonenpotenzials bis zum Jahr 2020 mit Ausblick bis 2050. Methoden, Annahmen und Datengrundlage. (IAB-Forschungsbericht 06/2009), Nürnberg, 46 p.