Skip to main content

Advertisement

SpringerLink
Log in

Internal migration, regional labour market dynamics and implications for German East-West disparities: results from a Panel VAR

Interne Migration, regionale Arbeitsmarktdynamik und Implikationen für Ost-West-Disparitäten: Ergebnisse auf Basis einer Panel VAR Analyse

  • Original Paper
  • Published:
Jahrbuch für Regionalwissenschaft Aims and scope Submit manuscript

Abstract

This paper analyses the causal linkages between regional labour market variables and internal migration flows among German states between 1991–2006. We adopt a Panel VAR approach to identify the feedback effects among the variables and analyse the dynamic properties of the system through impulse-response functions. We also use the model to track the evolution of the particular East-West migration since re-unification aiming to shed more light on the East German ‘empirical puzzle’, characterized by lower migration responses than expected from the regional labour market position relative to the West. Indeed we get evidence for such a puzzle throughout the mid-1990s, which is likely to be caused by huge West-East income transfers, a fast exogenously driven wage convergence and the possibility of East-West commuting. However, we also observe an inversion of this relationship for later periods: That is, along with a second wave of East-West movements around 2001 net flows out of East Germany were much higher than expected after controlling for its weak labour market and macroeconomic performance. Since this second wave is also accompanied by a gradual fading out of economic distortions and a downward adjustment of expectations about the speed of East-West convergence in standard of livings, this supports the view of ‘repressed’ migration flows for that period.

Zusammenfassung

Die Arbeit untersucht die kausale Beziehung zwischen regionalen Arbeitsmarktvariablen und internen Migrationsstömen für deutsche Bundesländer zwischen 1991–2006. Die Autoren verwenden ein VAR Modell mit Paneldaten zur Identifikation der Feedback Effekte zwischen den Variablen und zur Analyse der dynamischen Eigenschaften des Systems mit Hilfe von Impuls-Antwort Funktionen. Darüber hinaus wird das Modell verwendet, um die Entwicklung der spezifischen Ost-West Wanderungen nach der Wiedervereinigung zu analysien und das ostdeutsche ‚empirische Puzzle‘ zu beleuchten, welches eine Situation beschreibt, bei der Migrationsbewegungen nur unverhältnismäßig auf Arbeitsmarktungleichgewichte reagieren. In der Tat gibt die Analyse Hinweise für ein derartiges Puzzle in den 1990er Jahren, was insbesondere auf hohe West-Ost Einkommenstransfers, eine schnelle exogen getriebene Lohnanpassung an das West-Niveau sowie die Möglichkeit des Pendels zwischen den Makroregionen zurückzuführen ist. Allerdings dreht sich dieses Verhältnis in nachfolgenden Perioden: Entlang der zweiten Auswanderungswelle von Ost nach West um das Jahr 2001 sind die Netto-Ausströme aus Ostdeutschland viel höher als es die regionale Arbeitsmarktsituation erwarten lassen würde. Da diese zweite Abwanderungswelle mit dem graduellen Ausklingen der West-Ost Transferzahlungen und einer deutlich getrübten Erwartungshaltung hinsichtlich der Geschwindigkeit der Ost-West Einkommenskonvergenz einhergeht, wird für diese Periode der Abbau einer ‚zurückgestauten‘ Abwanderungswelle sichtbar.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alecke B, Untiedt G (2000) Determinanten der Binnenwanderung in Deutschland seit der Wiedervereinigung. Working Paper, University of Muenster

  • Alecke B, Mitze T, Untiedt G (2009) Internal migration, regional labour market dynamics and implications for German East-West disparities: results from a panel VAR. Ruhr Economic Papers No 96

  • Arellano M, Bond S (1991) Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Rev Econ Stud 58:277–297

    Article  Google Scholar 

  • Baltagi BH, Blien U (1998) The German wage curve: evidence from the IAB employment sample. Econ Lett 61:135–142

    Article  Google Scholar 

  • Baltagi BH, Blien U, Wolf K (2007) Phillips curve or wage curve? Evidence from West Germany 1980–2004. IAB Discussion paper No 14/2007

  • Bilger U, Genosko J, Hirte G (1991) Migration and regional labour market adjustment in West Germany. In: Stillwell J, Congdon P (eds) Migration models: macro and micro approaches, pp 152–167. London

  • Binder M, Hsiao C, Pesaran MH (2005) Estimation and inference in short panel vector autoregressions with unit roots and cointegration. Econom Theory 21(4):795–837

    Article  Google Scholar 

  • Blanchard O, Katz L (1992) Regional evolutions. Brookings Pap Econ Act 1:1–75

    Article  Google Scholar 

  • Blanchflower DG, Oswald AJ (1994) The wage curve. Cambridge

  • Blanchflower DG, Oswald AJ (2005) The wage curve reloaded. IZA Discussion Paper No 1665

  • Blundell R, Bond S (1998) Initial conditions and moment restrictions in dynamic panel data models. J Econom 87:115–143

    Article  Google Scholar 

  • Bode E, Zwing S (2008) Interregionale Arbeitskräftewanderungen: Theoretische Erklärungsansätze und empirischer Befund. Kieler Arbeitspapiere Nr 877, IfW

  • Bond S, Hoeffler A, Temple J (2001) GMM estimation of empirical growth models. CEPR Discussion Paper No 3048

  • Bonin H, Eichhorst W, Florman C, Hansen M, Skiöld L, Stuhler J, Tatsiramos K, Thomasen H, Zimmermann K (2008) Geographic mobility in the European Union: optimising its economic and social benefits. Final Report, EU Commission

  • Borjas GJ (1987) Self-selection and earnings of immigrants. Am Econ Rev 77(4):531–553

    Google Scholar 

  • Bowsher C (2002) On testing overidentifying restrictions in dynamic panel data models. Econ Lett 77(2):211–220

    Article  Google Scholar 

  • Bradley J, Mitze T, Untiedt G (2006) The role of federal transfers for the ‘Aufbau Ost’: a macro impact analysis with special focus on the industrial sector performance. Paper presented at the DIW Macroeconometric Workshop, November 2006, Berlin

  • Brücker H, Trübswetter P (2004) Do the best go West? An analysis of the self-selection of employed East-West migrants in Germany. IZA Discussion Papers No 986

  • Büchel F, Schwarze J (1994) Die Migration von Ost- nach Westdeutschland – Absicht und Realisierung. Mitt Arb markt- Berufsforsch 27(1):43–52

    Google Scholar 

  • Burda MC (1993) The determinants of East-West German migration. Some first results. Eur Econ Rev 37:452–461

    Article  Google Scholar 

  • Burda MC, Hunt J (2001) From reunification to economic integration: productivity and the labour market in East Germany. Brookings Pap Econ Act 2:1–92

    Article  Google Scholar 

  • Carlino J, Mills E (1987) The determinants of county growth. J Reg Sci 27:39–54

    Article  Google Scholar 

  • Chun J (1996) Interregional migration and regional development. Aldershot

  • Coulombe S (2006) Internal migration, asymmetric shocks and interprovincial economic adjustments in Canada. Int Reg Sci Rev 29(2):199–223

    Article  Google Scholar 

  • Decressin J (1994) Internal migration in West Germany and implications for East-West salary convergence. Weltwirtsch Arch 130:231–257

    Article  Google Scholar 

  • Decressin J, Fatas A (1995) Regional labour market dynamics in Europe. Eur Econ Rev 39:1627–1665

    Article  Google Scholar 

  • Destatis (2008) Bevölkerung und Erwerbstätigkeit. Wanderungen. Fachserie 1, Reihe 1.2. Verschiedene Ausgaben. Download from: https://www-ec.destatis.de

  • Dreger C, Erber G, Glocker D (2008) Regional measures of human capital in the European Union. SOEPpapers No 137, DIW Berlin

  • Dufour J-M, Khalaf L (2002) Exact tests for contemporaneous correlation of disturbances in seemingly unrelated regressions. J Econom 106:143–170

    Article  Google Scholar 

  • Eichenbaum M, Hansen L, Singelton K (1988) A time series analysis of representative agent models of consumption and leisure under uncertainty. Q J Econ 103:51–78

    Article  Google Scholar 

  • Etzo I (2007) Determinants of interregional migration in Italy: a panel data analysis. MPRA Paper No 5307

  • Etzo I (2008) Internal migration: a review of the literature. MPRA Paper No 8783

  • Fachin S (2007) Long-run trends in internal migrations in Italy: a study on panel cointegration with dependent units. J Appl Econom 51(4):401–428

    Article  Google Scholar 

  • Gallin J (1999) Net migration and state labor market dynamics. Board of Governors of the Federal Reserve System, Finance and Economics Discussion Series No 1999-16

  • Greenwood MJ, Hunt GL, Rickman DS, Treyz GI (1991) Migration, regional equilibrium, and the estimation of compensating differentials. Am Econ Rev 81:1382–1390

    Google Scholar 

  • Hansen L (1982) Large sample properties of generalised method of moments estimators. Econometrica 50:1029–1054

    Article  Google Scholar 

  • Harris JR, Todaro MP (1970) Migration, unemployment and development: a two sector analysis. Am Econ Rev 60:126–142

    Google Scholar 

  • Hatzius J (1994) Regional migration, unemployment and vacancies: evidence from West German microdata. Applied Economics Discussion Paper Series Nr 164, University Oxford

  • Hausman J (1978) Specification tests in econometrics. Econometrica 46:1251–1271

    Article  Google Scholar 

  • Hayashi F (2000) Econometrics. Princeton

  • Holtz-Eakin D, Newey W, Rosen HS (1988) Estimating vector autoregressions with panel data. Econometrica 56:1371–1395

    Article  Google Scholar 

  • Hunt J (2000) Why do people still live in East Germany? NBER Working Paper No 7645

  • Im K, Pesaran M, Shin Y (2003) Testing for unit roots in heterogeneous panels. Econom J 3:148–161

    Google Scholar 

  • Love I, Zicchino L (2006) Financial development and dynamic investment behavior: evidence from panel vector autoregression. Q Rev Econ Finance 46:190–210

    Article  Google Scholar 

  • Lu M (2001) Vector autoregression (VAR)—an approach to dynamic analysis of geographic processes. Geogr Ann 83B(2):67–78

    Article  Google Scholar 

  • Lütkepohl H (2005) New introduction to multiple time series analysis. Berlin

  • Mäki-Arvela P (2005) Regional evolutions in Finland: panel data results of a VAR approach to labour market dynamics. Reg Stud 37:423–443

    Article  Google Scholar 

  • Maza A, Villaverde J (2004) Interregional migration in Spain: a semiparametric approach. Rev Reg Stud 34(2):156–171

    Google Scholar 

  • McCann P (2001) Urban and regional economics. Oxford

  • Möller J (1995) Empirische Analyse der Regionalentwicklung. In: Gahlen B, Hesse H, Ramser H (eds) Standort und Region. Neue Ansätze zur Regionalökonomik. Tübingen

  • Muth R (1971) Migration: chicken or egg. South Econ J 37:295–306

    Article  Google Scholar 

  • Okun B (1968) Interstate population migration and state income inequality: a simultaneous equation approach. Econ Dev Cult Change 16:297–313

    Article  Google Scholar 

  • Parikh A, Van Leuvensteijn M (2003) Interregional labour mobility, inequality and wage convergence. Appl Econ 35:931–941

    Article  Google Scholar 

  • Partridge MD, Rickman DS (2006) An SVAR model of fluctuations in US migration flows and state labor market dynamics. Southern Economic Journal, April 2006

  • Puhani P (2001) Labour mobility—an adjustment mechanism in Euroland? Ger Econ Rev 2(2):127–140

    Article  Google Scholar 

  • Ragnitz J (2007) Explaining the East German productivity gap—the role of human capital. In: Paque K, Buch C (eds) what went wrong in East Germany and What can be done? A collection of Kiel working papers. IfW Kiel

  • Roodman D (2006) How to Do xtabond2: an introduction to ‘Difference’ and ‘System’ GMM in stata. Center for Global Development, Working Paper No 103

  • Roos M (2006) Regional price levels in Germany. Appl Econ 38(13):1553–1566

    Article  Google Scholar 

  • Salvatore D (1980) A simultaneous equations model of internal migration with dynamic policy simulations and forecasting. J Dev Econ 7:231–246

    Article  Google Scholar 

  • Sargan J (1958) The estimation of economic relationships using instrumental variables. Econometrica 26:393–415

    Article  Google Scholar 

  • Schneider L (2005) Ost-West-Binnenwanderung: Gravierender Verlust an Humankapital. Wirtsch Wandel 10:309–314

    Google Scholar 

  • Schreiber S (2007) The Hausman test statistic can be negative even asymptotically. Unpublished manuscript, Goethe University Frankfurt

  • Schwarze J (1996) Beeinflusst das Lohngefälle zwischen Ost- und Westdeutschland das Migrationsverhalten der Ostdeutschen? Allg Stat Arch 80(1):50–68

    Google Scholar 

  • Schwarze J, Wagner G (1992) Abwanderung von Arbeitskräften und Einkommenspolitik. DIW Wochenbericht 59:58–61

    Google Scholar 

  • Siebert H (1994) Geht den Deutschen die Arbeit aus? Neue Wege zu mehr Beschäftigung. Bertelsmann, Muenchen

    Google Scholar 

  • Smolny W, Stiegler M (2004) Dynamic adjustment and long-run equilibria. Panel data estimates for the East German states. Working paper University of Ulm

  • Stillwell J (2005) Inter-regional migration modelling: a review and assessment. Paper presented at the 45th Congress of the European Regional Science Association, Amsterdam, 25–27 August 2005

  • Summers P (2000) Labour market analysis with VAR models. Melbourne Institute Working Paper No 19/00

  • VGRdL (2008) Volkswirtschaftliche Gesamtrechnungen der Bundesländer (Regional Accounts for German States). Download from: http://www.vgrdl.de

  • Wagner G (1992) Arbeitslosigkeit, Abwanderung und Pendeln von Arbeitskräften der neuen Bundesländer. Soz Fortschr 4:84–89

    Google Scholar 

  • Wagner J (1994) German wage curves. Econ Lett 44:307–311

    Article  Google Scholar 

  • Windmeijer F (2005) A finite sample correction for the variance of linear efficient two-step GMM estimators. J Econom 126:25–51

    Article  Google Scholar 

  • Wolff S (2006) Migration und ihre Determinanten im ost-westdeutschen Kontext nach der Wiedervereinigung: Ein Literaturüberblick. Discussion Paper No 130, University of Goettingen

Download references

Author information

Authors and Affiliations

  1. GEFRA Münster, Ludgeristr. 56, 48143, Münster, Germany

    Björn Alecke

  2. RWI Essen, Hohenzollernstr. 1-3, 45128, Essen, Germany

    Timo Mitze

  3. GEFRA Münster & Technical-University Clausthal, Ludgeristr. 56, Münster, Germany

    Gerhard Untiedt

Authors
  1. Björn Alecke
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Timo Mitze
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Gerhard Untiedt
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Timo Mitze.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Alecke, B., Mitze, T. & Untiedt, G. Internal migration, regional labour market dynamics and implications for German East-West disparities: results from a Panel VAR. Jahrb Reg wiss 30, 159–189 (2010). https://doi.org/10.1007/s10037-010-0045-3

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10037-010-0045-3

Keywords

JEL Classification

Search

Navigation