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A Panel VAR Approach for Internal Migration Modelling and Regional Labor Market Dynamics in Germany

In: Empirical Modelling in Regional Science

Author

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  • Timo Mitze

    (Rheinisch-Westfälisches Institut für Wirtschaftsforschung)

Abstract

This chapter analyzes the causal linkages between regional labor market variables and internal migration flows among German states between 1991 and 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 labor 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 labor 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 standards of living, this supports the view of ‘repressed’ migration flows for that period.

Suggested Citation

  • Timo Mitze, 2012. "A Panel VAR Approach for Internal Migration Modelling and Regional Labor Market Dynamics in Germany," Lecture Notes in Economics and Mathematical Systems, in: Empirical Modelling in Regional Science, edition 127, chapter 0, pages 19-52, Springer.
    • Handle: RePEc:spr:lnechp:978-3-642-22901-5_2
    DOI: 10.1007/978-3-642-22901-5_2
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    Citations

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    Cited by:

    1. Michael Landesmann & Sandra M. Leitner & Isilda Mara, 2015. "Intra-EU Mobility and Push and Pull Factors in EU Labour Markets: Estimating a Panel VAR Model," wiiw Working Papers 120, The Vienna Institute for International Economic Studies, wiiw.
    2. Sandra M. Leitner, 2022. "A skill‐specific dynamic labour supply and labour demand framework: A scenario analysis for the Western Balkan countries to 2030," LABOUR, CEIS, vol. 36(4), pages 471-504, December.
    3. João Lourenço Marques & Muhammad Tufail & Jan Wolf & Mara Madaleno, 2021. "Population Growth and the Local Provision of Services: The Role of Primary Schools in Portugal," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 40(2), pages 309-335, April.
    4. Michael Landesmann & Isilda Mara, 2021. "Interrelationships between Human Capital, Migration and Labour Markets in the Western Balkans: An Econometric Investigation," wiiw Working Papers 196, The Vienna Institute for International Economic Studies, wiiw.
    5. Stefan Jestl & Michael Landesmann & Sandra M. Leitner, 2015. "Migrants and Natives in EU Labour Markets: Mobility and Job-Skill Mismatch Patterns," wiiw Research Reports 403, The Vienna Institute for International Economic Studies, wiiw.
    6. Michael Landesmann & Sandra M. Leitner, 2015. "Labour Mobility of Migrants and Natives in the European Union: An Empirical Test of the 'Greasing of the Wheels’ Effect of Migrants," wiiw Working Papers 119, The Vienna Institute for International Economic Studies, wiiw.

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