Analysis of regional labour market dynamics: In search of indications for self-organised criticality

Abstract.

Self-Organised Criticality (SOC) is a concept developed over the last decade from dynamic systems analysis that aims to investigate the transition trajectories of evolutionary systems. The main emphasis in SOC is on the analysis of the impact of slow exogenous forces in combination with strong localised interactions between single elements or components of the systems concerned, with particular regard to the attainment of a critical state at the macro-level. Against this background, SOC serves to identify the critical conditions from the internal dynamics of the systems that lead to major and significant transformations of their behaviour. The present paper aims to offer insights and reflections originating from the SOC concept, as well as to explore its potential contribution to understanding the evolution of regional economic patterns, in particular the functioning of regional labour markets. In our study, the evolutionary dynamics of employment at a district level in West Germany as well as in the combined West and East German setting will be investigated, in order to detect the possible existence of a power law distribution of growth rates, which may be seen as an indication for SOC at the macro-economic level. In this context, SOC may help to explain the presence of large socio-economic regional fluctuations in a country, and, in general, the dynamics inherent to regional development.