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It is often stated that certain occupations in Germany, because of “Demographic Change “, are dwindling, implying a labor shortage. We investigate the 10-year wage growth of young employees entering the labor market in different occupations. Our findings suggest that regional labor market tightness in occupational fields significantly explains wage growth. Individuals who start their careers in a tighter labor market enjoy higher wage growth than workers in more relaxed labor markets. We identify some occupational fields where the effect is especially strong, such as several engineering groups, IT occupations, technicians, and some commercial occupations. Interestingly, health-care occupations reveal a reverse relation.

We present empirical evidence suggesting that technological progress in the digital age will be biased not only with respect to skills acquired through education but additionally with respect to non-cognitive skills (personality). We measure the direction of technological change by estimated future digitalization probabilities of occupations, and non-cognitive skills by the Big Five personality traits from four German worker surveys. Even though we control for education and work experience, we find that workers who are more open to experience, emotionally more stable and less agreeable will tend to be less susceptible to digitalization. We also find that future technological progress may not continue to hollow out the middle class as much as it did in the recent past. These results suggest that education and labor market policies should put more emphasis on children’s and workers’ personalities to strengthen their labor market resilience in the digital age.

Knowledge-intensive business services (KIBS) are widely perceived as being important drivers of technological progress and innovation. They generally depend on knowledge exchanges and, therefore, geographical proximity to markets, customers and suppliers would be expected to be a critical factor in their performance. This paper investigates how the innovation performance of German KIBS firms is related to their distance and size from the nearest city. The analysis largely conforms to a textbook type of spatial urban hierarchy and, indeed, finds that there are very strong distance-decay and city size effects, and these also vary according to the innovation type.

Dieser Beitrag widmet sich der Entlohnungsstruktur von ausländischen und deutschen sozialversicherungspflichtig Vollzeitbeschäftigten und zielt auf die Lohnzuwächse durch die Aneignung von zusätzlicher Erfahrung auf dem deutschen Arbeitsmarkt. Bisherige Erkenntnisse für Deutschland deuten darauf hin, dass Arbeitsmarkterfahrung bei Ausländern im Vergleich zu deutschen Beschäftigten zu keinen oder nur geringen Lohnzuwächsen führt. Wir identifizieren und diskutieren Ursachen und Erklärungen für diese flacheren Erfahrungskurvenprofile, was insbesondere vor dem Hintergrund der Einkommensungleichheit zwischen beiden Gruppen relevant ist. This paper sheds light on the wage structure of foreign and German employees who are subject to social security contributions in fulltime employment and focuses on the experience structure. Existing evidence suggests that additional labour market experience is rewarded less for migrants than for their German counterparts. We identify and discuss reasons and explanations for migrants' flat experience curves, which is particularly important in the light of the debate on inequality between both groups. These explanations include: the recognition of vocational training degrees, the successful passing of vocational training in Germany, German citizenship by naturalisation, and the labour market experience. After ten to 15 years in the German labour market, we identify convergence in the returns to labour market experience.

The German labour force is expected to shrink in the next two decades due to a decline in population. Therefore, the immigration of workers from abroad could compensate for potential negative consequences of such population decline. Is Germany competitive for immigration—i.e., do German employers pay enough to make it attractive as a destination country? We explore the wage gap between foreigners and German employees in particular and focus on different countries of origin to better understand issues related to wage setting among these groups. For this purpose, a threefold Oaxaca–Blinder decomposition is performed using comprehensive data with a vast amount of information on a large number of workers and firms. The results suggest that most of the wage gap can be explained by observed characteristics, and in most cases, very little difference remains unexplained. We provide evidence on differences specific to the country of origin which could be taken into consideration to attract people from abroad to better integrate them into the German labour market.

The international trade literature highlights the importance of firm productivity and economies of scale on the firm’s international export success. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to related firms and they gain from knowledge spillovers and other positive externalities. They may also benefit from a potentially large supply of diverse workers that possess distinct knowledge and problem-solving skills. In such environments, firms may be more prone to export. In this paper, we employ a comprehensive German data set that combines survey and administrative data. We ask whether German firms (i.e., establishments) export more as a result of localization and urbanization externalities, and labor market pooling associated with workforce diversity, while controlling for a variety of establishment characteristics. Using a fractional response model, we provide evidence that manufacturers and smaller establishments benefit more from externalities and especially from knowledge spillovers. There is less evidence supporting the benefit of workforce diversity; however, that factor may be associated with between-establishment variation.

This paper examines the link between innovation and the endowments of creative and science oriented STEM – Science, Technology, Engineering and Mathematics – workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities ‘smarter’. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.

There is evidence from the literature that firms enjoy higher productivity levels, when the workforce employed is culturally more diverse. It is an open question whether this gain is utilized to shift the supply curve and set lower prices in order to achieve a higher demand and possibly higher revenues. This knowledge gap is not addressed in the existing literature and forms the departure of our research. We introduce a reduced-form model, inspired by the study of Melitz and Ottaviano on heterogeneous firms, and add labor productivity by using the approach of Ottaviano and Peri on cultural diversity. In our empirical study, we employ German data, while the field of research is conducted for single plants, and industry-specific effects are taken into account. Our analysis shows significant positive effects of the cultural diversity of the high-skilled workforce on the market size of single establishments. We conclude that emerging productivity gains are not just paid as dividend or factor rewards but are also used to set lower prices in order to achieve higher demand.

Several studies have sought evidence as to whether ethnically diverse teams promote a diversity in knowledge and perspectives which is beneficial for innovation. In multicultural societies, however, there are multiple opportunities for exchange between people from different ethnic backgrounds, and the extent to which such encounters actually imply cognitive diversity seems debatable. We propose to regard as diverse those combinations of ethnic backgrounds that are relatively unlikely to occur under a hypothesis of random allocation to firms, based on the distribution of nationalities at NUTS3 level. We label this measure ``unusualness'' and apply it to the study of innovation in newly founded firms in Germany. Our results reveal that unusualness has a robust positive association with the probability of a start-up introducing an innovation within the first two years of business, while diversity as measured by a standard Blau index is insignificant. The results are robust to a large set of robustness checks. We interpret these results as an indication that not all combinations of national origins matter for innovation, but only those that are associated with differences in cognitive approaches and knowledge.

Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if 'cultural diversity' affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers –either in the establishment or in the region –does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.

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.

There is a broad body of theoretical and empirical literature dealing with trip chaining behaviour. This paper adds to the literature while focusing on the impact of activity chaining on the duration of time spent on individual purposes. Two questions in particular are addressed: first, does an additional purpose added to a trip chain affect the duration of the activities included? Second, is there any pattern of included activities that explains differences in duration? Duration data models are employed using German data. We find evidence that the number of purposes influences duration significantly. Leisure, shopping and personal business activities are affected by the occurrence of obligatory activities (work, school/university). We cannot find any evidence that personal business or leisure activities influence the duration of shopping, whereas the opposite is supported. Therefore, in terms of daily activities, obligatory and shopping activities are superior to leisure and personal business. We conclude that activity chaining and especially the pattern of combined purposes affect the duration of activities allocated to single purposes while controlling for a wide range of other explanatory variables. The results can be used in transport and simulation models.

Because of an inflow of people into the EU but also because of the freedom of workplace choice within the EU, European regions are becoming more diverse in cultural terms. Despite the redistribution of labour and changes in regional labour supply, the ultimate question raised is whether there are additional gains or losses as a result of immigration flows. This paper therefore focuses on the impact of migrants on regional Gross Domestic Product per capita for European regions. Does the proportion of foreigners in the labour force increase or lower regional income? Does the composition of non-natives with respect to their countries of origin matter? We provide evidence that immigration and a higher degree of cultural diversity raise regional income, while controlling for endogeneity. We show that cultural diversity promotes income gains for destination countries. Whereas the presence of dominant groups reduces the costs of interaction and integration, diversity among foreign-born people increases the supply of different skills, knowledge and tasks. Thus, in general immigration has a positive net effect on regional performance and the costs of immigration in destination regions are balanced out. The regions of origin within the EU face a rise or a decline in income, depending on the labour market status of movers.

We explore the impact of the age structure of human capital on average regional productivity by applying a spatial econometric analysis based on an augmented Lucas-type production function. We also apply a new definition of regional human capital focusing on its availability. The estimates provide evidence that there are age specific human capital effects in Germany and that a temporary increase in regional productivity could occur during the demographic transition. Furthermore, it becomes clear that the availability-based definition of human capital provides additional insight and so, could enrich future studies on regional human capital. Resumen Exploramos el impacto de la estructura de edades del capital humano sobre la productividad regional media mediante un analisis econometrico espacial basado en una funcion de produccion tipo Lucas aumentada. Aplicamos tambien una nueva definicion de capital humano regional poniendo enfasis en su disponibilidad. Las estimaciones aportan pruebas de que en Alemania existen efectos del capital humano especificos de la edad y que la productividad regional podria aumentar temporalmente durante la transicion demografica. Ademas, queda claro que la definicion de capital humano basada en la disponibilidad aporta conocimientos adicionales y por lo tanto podria enriquecer en el futuro estudios sobre capital humano regional.

Contents:PART I URBAN CREATIVITY AND GROWTH1. Complexity, Scientific Creativity and ClusteringAke E. Andersson, David Emanuel Andersson, Bjorn Harsman and Zara Daghbashyan2. Agglomeration Economies and Smart CitiesAna Maria Bonomi Barufi and Karima Kourtit3. Smart Specialization Strategies and Smart Cities: An Evidence-Based Assessment of EU policies Andrea Caragliu and Chiara F. Del Bo4. Agglomeration Economies in Large vs. Small Cities: Similar Laws, High SpecifitiesRoberto Camagni, Roberta Capello and Andrea CaragliuPART II CITIES, INNOVATION AND PRODUCTIVITY5. Multi-Actor Analysis of Metropolitan Performance AnalysisKarima Kourtit, Miruna Mazurencu and Peter Nijkamp6. Entrepreneurial Governance for Local GrowthAmy Rader Olsson, Hans Westlund and Johan P. Larsson7. Cities as Seedbeds of Responsible InnovationMarina van Geenhuizen and Qing Ye8. Innovation Capacity, Workforce Diversity and Intra-industrial Externalities: A Study on German EstablishmentsStephan Brunow and Valentina Nafts PART III URBAN SYSTEMS, INFRASTRUCTURE AND SUSTAINABLE DEVELOPMENT9. Exploring Surface Transportation Impact on Economic Output: A Panel Granger Causality Test Zhenhua Chen and Kingsley Haynes10. An Accessibility Index for the Metropolitan Region of Sao PauloRenato S. Vieira and Eduardo A. Haddad11. Urbanization and Quality of Life: An Overview of Health Impacts of Urban and Rural Residential PatternsNoriko Ishikawa, Karima Kourtit and Peter Nijkamp12. Dynamic Analysis on Energy Rebound Effects in Megacities: Evidence from Beijing and Shanghai, China (1990-2011) Yuyuan Wen13. How Should Cities Manage Economic Development? Highlights from Theory and PracticeMarlon G. Boarnet and Richard K. GreenIndex

European regions differ considerably in their population age structure. This implies the questions, whether a specific age structure is favorable for regional per capita output growth and whether differences in the age structure induce differences in per capita output growth between regions. To explore this questions we carried out a spatial econometrics cross-section analysis of the NUTS2 regions of the EU15. We found evidence that there is such a link and that spatial autocorrelation matters, even after controlling for country specific effects. The most significant growth effect is generated by the cohort of age 30–44.

Recent research suggests that the welfare gains that would result from removing restrictions on international migration are large. The long-run impact of a higher level of international migration on the global economy is potentially even larger if it triggers an increase in the global growth rate, but such a growth rate impact is much harder to determine empirically. We estimate regression models of 1950–2010 decadal growth in most countries of the world and show that a country's net migration in any decade has been neither harmful nor beneficial to growth in real income per capita in that decade, in contrast with natural increase (births minus deaths), which has been harmful to growth. When using lags, there is evidence that in rich countries net migration benefits growth in the long run, while natural increase in these countries generates a demographic dividend for growth after about two decades. In developing countries net outward migration also appears to boost growth in the long run. Hence greater cross-border mobility contributes to higher global long-run growth. We reconcile this empirical evidence with exogenous and endogenous growth theories, as well as with theories of economic geography and agglomeration. We consider a wide range of channels through which migrants can influence productivity growth in sending and receiving countries, such as education and training decisions, skill and diversity spillovers, age structure, entrepreneurship, trade, remittances, and clustering.

This article shows how the impulses of the transformation process in eastern Germany have spread through the economy and the labour market. The form of transformation has long-term effects on the form of control over the economy; it is managed largely from western firms. This fact has manifold consequences for the innovation behaviour of plants, among others, which in turn is further related to productivity and thus to the labour market. We argue that this transfers further to persistently lower wages and higher unemployment rates in eastern compared with western Germany.

Theoretical and empirical contributions on export behavior highlight the importance of firms' productivity and their levels of economies of scale on firms' export success in `foreign’ markets. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to competitors or upstreaming industries and they benefit from knowledge spillovers and other positive externalities. In such a stimulating environment, firms become more prone to be exporters. Beyond the role played by externalities, firms may benefit when they employ a diverse workforce and when the interaction of distinct knowledge and related problem-solving abilities increases productivity and secures export success. In this paper, we ask whether German firms (i.e., establishments) benefit from localization and urbanization externalities and face higher export proportions. We also control for a variety of establishment characteristics and workforce diversity. For this purpose, a comprehensive German data set that combines survey data and administrative data is used. While controlling for firm heterogeneity in a fractional response model, we provide evidence that manufacturing establishments and smaller establishments (up to 250 employees) benefit most from externalities and especially from knowledge spillover. There is weak evidence supporting the benefit of workforce diversity; however, that factor could explain between-establishment variation.

Wenn Unternehmen einen Mangel an qualifizierten Fachkräften beklagen, gleichzeitig aber flexible Formen der Beschäftigung zunehmen, stellt dies nicht unbedingt einen Widerspruch dar. Vielmehr zeigen sich dadurch die großen Unterschiede bei Angebot und Nachfrage auf verschiedenen Teilarbeitsmärkten.

In the presence of agglomeration economies one might expect a relocation and concentration of industries. Then firm start-up activities may be assumed to reveal those effects. We introduce an empirical testable model inspired by the New Economic Geography and human capital externalities literature. The novelty of this paper is that it derives a measure of agglomeration economies founded on microeconomic analysis based on households' and firms' maximization behavior, namely the real market potential. Besides agglomeration forces, dispersion and human capital effects can be separated and explicitly controlled for. The paper sheds new light on the general mechanisms of intra-industrial agglomeration forces because it explicitly considers the regional distribution of economic activities. It offers clear evidence for the empirical relevance of the New Economic Geography.

Der in der öffentlichen Diskussion oft beschworene Mangel an Fachkräften lässt sich nur schwer mit harten Zahlen belegen. Die bisher verwendeten Maße sind für sich genommen nur zum Teil in der Lage, einen Mangel an Fachkräften zuverlässig zu erfassen beziehungsweise zu quantifizieren. Das gilt erst recht für einzelne Berufe in einzelnen Regionen.

Die Wirtschaft benötigt Fachkräfte. Wenn die Bevölkerung in Deutschland zukünftig schneller altert und schrumpft, stehen weniger Arbeitskräfte zur Verfügung. Gleichwohl muss daraus nicht zwangsläufig ein unlösbares Problem entstehen. Denn die Akteure des Arbeitsmarktes reagieren laufend auf demografische Entwicklungen. Löhne steigen, die Nachfrage ändert sich, Arbeitskräfte wandern zwischen Regionen oder Berufen, Betriebe begegnen Engpässen mit neuen Rekrutierungsstrategien oder verstärkten Bildungsinvestitionen. Der Markt passt sich an. Doch solche dynamischen Prozesse stoßen auch an ihre Grenzen.

There is evidence from the literature that firms enjoy higher productivity levels when the workforce employed is culturally more diverse. It is an open question whether this gain is utilized to shift the supply curve and set lower prices, in order to achieve a higher demand and possibly higher revenues. This knowledge gap is not addressed in the existing literature, and forms the departure of our research. We introduce a reduced-form model, inspired by the study of Melitz and Ottaviano (2008) on heterogeneous firms, and add labour productivity by using the approach of Ottaviano and Peri (2005) on cultural diversity. In our empirical study, we employ German data, while the field of research is conducted for single plants, and industry-specific effects are taken into account. Our analysis shows significant positive effects of the cultural diversity of the high-skilled workforce on the market size of single establishments. We conclude that emerging productivity gains are not just paid as dividend or factor rewards but are also used to set lower prices in order to achieve higher demand.

There is evidence from the literature that firms enjoy higher productivity levels when the workforce employed is culturally more diverse. It is an open question whether this gain is utilized to shift the supply curve and set lower prices, in order to achieve a higher demand and possibly higher revenues. This knowledge gap is not addressed in the existing literature, and forms the departure of our research. We introduce a reduced-form model, inspired by the study of Melitz and Ottaviano (2008) on heterogeneous firms, and add labor productivity by using the approach of Ottaviano and Peri (2005) on cultural diversity. In our empirical study, we employ German data, while the field of research is conducted for single plants, and industry-specific effects are taken into account. Our analysis shows significant positive effects of the cultural diversity of the high-skilled workforce on the market size of single establishments. We conclude that emerging productivity gains are not just paid as dividend or factor rewards but are also used to set lower prices in order to achieve higher demand.

Die Bevölkerung Deutschlands wird in den kommenden Jahren schrumpfen und altern. Das Verhältnis zwischen der Nachfrage nach und dem Angebot an qualifi zierten Arbeitskräften wird sich voraussichtlich zugunsten des Arbeitskräfteangebots verschieben. Trotzdem wird es einen allein demografisch verursachten Mangel an qualifi zierten Arbeitskräften kaum geben, weil die Löhne auf lange Sicht nach oben hin ausreichend fl exibel sind, um Marktveränderungsprozesse auszugleichen. Die Verknappung qualifi zierter Arbeitskräfte dürfte mit steigenden Löhnen einhergehen.

After the crisis years of 2008 and 2009 EU countries followed different employment pathes. Employment and wage levels, for instance, are quite unevenly distributed across Europe. Some of the member states expect labour shortages due to demographic change in the future. If this is the case, wages will rise when the shortages occur. From literature on migration it is well known that regions with relatively higher income levels and a lower risk of unemployment are typical destination countries for immigration. Thus, European regions might be expected to become rather mixed in cultural terms in the future. Despite the filling of the labour market and the redistribution of the resource of labour, the ultimate question raised in the discussion is whether there are additional gains or losses due to immigration. This work therefore focuses on the impact of migrants on regional GDP per capita for European regions. Does the proportion of foreigners in the labour force increase or lower regional income? Does the composition of non-natives with respect to their countries of origin matter? Both questions are addressed in this study while controlling for endogeneity. We provide evidence that immigration raises regional income and a tendency towards (roughly classified) dominant foreign-born groups reduces the costs of interaction and integration. Thus, in general immigration has a positive effect on regional performance and the costs of immigration in destination regions are balanced out. Depending on the labour market status of migrants, the regions of orgin of migrants within the EU face a rise or decline in income as a result of the outflow.

This paper analyses regional firm growth on industry level. To address this question the theoretical models of the New Economic Geography literature of Baldwin (1999), Baldwin et al. (2001) and Martin and Ottaviano (1999) are taken and augmented to a multi-sector approach to find an empirical specification. The main difference to existing literature on firm growth is that interregional demand linkages and human capital spillover and agglomeration effects are explicitly taken into account. They are derived by theoretical considerations. The approach is flexible enough to deal with competitive markets and monopolistic competition situations as well. From an empirical point of view a Spatial Durbin Model on industrial level results. Typically within the firm growth literature productivity per worker is a crucial explanatory variable. Our model suggests that average productivity per firm, and especially the market potential of a single firm, is relevant for firm formation. We employ German data (establishment history panel) in a Panel setting.

This paper analyses the impact of the regional age structure on growth of German regions. Based on a neoclassical growth model an augmented Solow model was derived and estimated in a spatial econometric approach. Besides labor and human capital, public spendings and urbanisation measures are controlled for. Adding the age structure of the employed labor force, which we use as proxy for the age pattern of human capital, improves the regression model significantly. Spatial autocorrelation is controlled for and supports OLS results. To get deeper insights in the effectiveness of the age structure quantile regression techniques are applied to distinguish the effects between various levels of growth rates. The results of the different estimation approaches provide evidence that the age structure matters for growth.

This paper analyses the impact of the regional age structure on growth of German regions. Based on a neoclassical growth model an augmented Solow model was derived and estimated in a spatial econometric approach. Besides labor and human capital, public spendings and urbanisation measures are controlled for. Adding the age structure of the employed labor force, which we use as proxy for the age pattern of human capital, improves the regression model significantly. Spatial autocorrelation is controlled for and supports OLS results. To get deeper insights in the effectiveness of the age structure quantile regression techniques are applied to distinguish the effects between various levels of growth rates. The results of the different estimation approaches provide evidence that the age structure matters for growth.

We explore the impact of the age structure of human capital on average regional productivity by applying a spatial econometric analysis based on an augmented Lucas-type production function. We also apply a new definition of regional human capital focusing on its availability. The estimates provide evidence that there are age specific human capital effects in Germany and that a temporary increase in regional productivity could occur during the demographic transition. Furthermore, it becomes clear that the availability based definition of human capital provides additional insight and so, could enrich future studies on regional human capital.