Demographic change and regional labour markets

Abstract Like many other countries, Germany has experienced rapid population and workforce ageing, yet with substantial variation across regions. In this paper we first use spatial between 1975 2014 to estimate quasi-causal supply effects of ageing on regional labour market outcomes, drawing the identification strategy Böhm Siegel (2020). We find in our panel German regions that mean age considerable negative wage returns age. also obtain suggestive evidence relative employment rates older workers decline when rises. A decomposition heterogeneous trends using estimates shows rural is mainly driven by (reflecting local dynamics) whereas urban demand responses economic conditions). discuss differential implications these drivers for policy.