Download Gearing up for 2020 - Assembly of European Regions

Migration: Building regional advantage
GA 2008
Assembly of European Regions (AER)
Open Space – International Speaker‘s Corner
Nov 13th 2008, Tampere
Dr. Tina Haisch, Economist, BAK Basel Economics
www.bakbasel.com
Content
Who is BAK?
Why is it important to talk about migration?
Business climate vs. People‘s climate
Concept
Migration and economic development
Research questions
Method
Econometric analysis
Conclusions
www.bakbasel.com
BAK Basel Economics: Independent economic research

Swiss economic research & consultancy institute

Staff: 35 (thereof 19 economists)

Economic data, analysis and consultancy for countries, regions and
industries

Benchmarking, forecasts, research projects (e.g. statistical/econometric
analyses, SWOT analyses, elaboration and evaluation of regional visions
and strategies)

Analytical work based on BAK’s vast performance (Gross value added at current,
constant prices as well as industry specific purchasing power parities, employment, hours worked, output per man
hour,labour cost and unit labour cost (30 variables)) and
location factor database (Indicators for
regulation, taxation, innovation capacity, accessibility etc.)
www.bakbasel.com
Regions - Not Only Countries
Business Sectors – Not Only Macro Level
Time series for
800 regions in
24 countries
NUTS1 to NUTS3
45 industry sectors
(NACE). In selected
industries more details
(Life Sciences, Finance,
Technology, Tourism)
Countries
Regions
www.bakbasel.com
Migration: Building regional advantage
www.bakbasel.com
Building regional advantage
In recent years the effects of migration, expressed through research questions like
do people follow jobs (does employment drive population changes) or
do jobs follow people (does population drive employment changes)
on regional economic development have gained considerable interest among researchers,
politicians and economic actors.
->
->
->
empirical results (nature of causality) differ a lot across space and time
a meta analysis conducted by Hoogstra et. al in 2005 compared the results
of 37 studies from 1987 to 2003. They found empirical evidence for the
hypothesis „jobs follow people“
Furthermore they found out that the chosen regions/countries and time
periods have major influence on the results
www.bakbasel.com
Building regional advantage: Business Climate vs. People Climate
Business climate:
Economic performance, the development of
Clusters and Regional Innovation Systems are
based on the creation of localisation economies
as well as on other factors (company taxation,
regulation etc.)
Silicon Valley, CA, USA
People’s climate:
Focusing on quality of life, taxation, diversity,
creativity
and
tolerance
emphasizing
urbanisation economies. Such an environment
attracts talents which in turn attract and
generate
innovative,
knowledge-based
economic activity
Cologne city beach, Germany
www.bakbasel.com
Concept: Explaining employment and economic performance
Regulation
Taxation
Innovation
Governance
Migration
Quality of Life
Accessibility
Economic performance
of regions
www.bakbasel.com
Interaction between migration and economic growth
Attractiveness of regions and countries
Political attractiveness
• Stability
• Institutions (laws,
immigration policy etc.)
Other attractiveness
• Accessibility
• Quality of life
• etc.
Economic attractiveness
• Performance
• Employment
• Taxation
Migration
• Refugees
• Asylum seekers
• etc.
• Migrant labour
• Expatriates
• etc.
• Students
• Alumnis
• etc.
Attractiveness of regions and countries
• GDP
• Employment (jobs)
• Taxation
• Regulation
• Productivity
• Job vacancy
• Quality of life
• Innovation resources
• etc.
www.bakbasel.com
Questions to be answered with regard to regional advantage
1. Is economic performance the driver of migration
or is migration the driver of economic performance?
2. Do people follow jobs or do jobs follow people?
www.bakbasel.com
Method
sample for empirical analysis:
40 metropolitan regions in Europe and the US
26 years (1980 – 2006)
methods employed:
- Simple correlations
- Correlations (with time leads and lags) to show the time structure
- Granger (1969) causalities for testing the significance of correlation
Simultaneous testing for the equations:
(1)
yt = a0 +a1yt–1 + … +alyt–l + b1xt–1 + … + blxt–l +et
(2)
xt = a0 +a1xt–1 + … +alxt–l + b1yt–1 + … + blyt-l +ut
F-test with null hypothesis b1 = b2 = … = bl = 0
assumptions:
natural population changes are similar across the investigated metropolitan regions
therefore migration can be estimated by population changes
Source: BAK Basel Economics
www.bakbasel.com
Relation of economic performance and people
2%
Barcelona
population growth 2001-2006
Madrid
2%
Dublin
Los Angeles
San Diego
Oslo
1%
Milano
San Francisco
Marseille
1%
0%
Berlin
Stuttgart
Frankfurt
Stavanger
München
Brüssel
Luxemburg
Rom
Paris
Göteborg
Antw erpen
Helsinki
Amsterdam
Edinburgh
Oresund
Manchester
Birmingham
Arhus
Köln
Neapel
Genf
Wien
Lissabon Lyon
r = 0.4
Stockholm
London
Athen
Boston Glasgow
Nancy
Liverpool
-1%
-1%
0%
1%
2%
3%
4%
5%
real GDP growth 2001-2006
Source: BAK Basel Economics
www.bakbasel.com
Relation of jobs and people
2.0%
Barcelona
population growth 2001-2006
Madrid
1.5%
Dublin
r = 0.52
Los Angeles
San Diego
1.0%
Oslo
Genf
Wien
Brüssel
Milano
München
San Francisco
Lyon
Stavanger
London
Stockholm
Rom
Lissabon
Antw
erpen
Paris
Athen
0.5%
Helsinki Göteborg
Manchester Oresund
Edinburgh
Amsterdam
Marseille
Stuttgart
Neapel Birmingham
Köln
Arhus
Frankfurt
Boston
Glasgow
0.0%
Berlin
Nancy
Luxemburg
Liverpool
-0.5%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
employment growth 2001-2006
Source: BAK Basel Economics
www.bakbasel.com
Economic performance and employment (jobs)
m a x i m um
Correlation (employment growth (t+i); GDP growth (t))
9 5 %- pe r c e nt i l e
m e di a n
5 %- pe r c e nt i l
m i ni m um
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
Economic performance today affects employment growth today
Economic performance affects employment growth one year later
Source: BAK Basel Economics
www.bakbasel.com
Economic performance and migration
M a x i mu m
Correlation (GDP growth (t+i) ; population growth (t))
9 5 %- P e r c e n t i l
M edi an
5 %- P e r c e n t i l
M i n i mu m
100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
Migration today results from economic growth in the last 4 years.
Source: BAK Basel Economics
www.bakbasel.com
Employment and migration
M a x i m um
Correlation (employment growth (t+i) ; population growth (t))
9 5 %- P e r c e nt i l
M e di a n
100%
5 %- P e r c e nt i l
M i ni m um
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
Migration today results from job growth in the last 4 years (people follow jobs).
Source: BAK Basel Economics
www.bakbasel.com
Until now it seems that…
–
GDP growth today leads to job growth one year later
–
GDP growth today leads to migration (population growth) up to 4 years later
–
employment growth today leads to migration (population growth) up to 4
years later
www.bakbasel.com
..and after testing for significance (Granger causality):
1.
Is economic performance the driver of migration or is migration the driver of
economic performance?
Log (population) causes Log (GDP)
Log (GDP) causes Log (population)
Lags
alpha
5%
Lags
1
5
2
11
3
12
4
6
5
6
6
5
7
3
8
3
alpha
5%
1
26
2
16
3
12
4
10
5
9
6
7
7
6
8
3
-> Economic performance is the driver of migration!
2.
Do people follow jobs or do jobs follow people?
Log (population) causes Log (employment)
Log (employment) causes Log (population)
Lags
alpha
5%
1
8
2
15
3
11
4
9
5
10
6
10
7
7
8
3
alpha
5%
berücksichtigte Lags
1
2
3
4
21
7
8
10
5
7
6
6
7
5
8
2
-> In the short run: people follow jobs
-> but in the long run jobs also follow people
Source: BAK Basel Economics
www.bakbasel.com
Conclusions: Lessons learned from the data
effects with a time lag of ~ 1 year
Economic Growth
Employment Growth
effect with a time lag of ~ 4 years
Population Growth = Migration
effects with a time lag of ~ 2 - 6 years
Employment Growth
www.bakbasel.com
Conclusions: Lessons learned from the data
►
Migration is an important factor for economic success and for
regional advantage!
►
Economic growth is the catalyst for job growth and migration
►
But: Causality is directed forwards and backwards!
www.bakbasel.com
What should regional actors take into account?
►
Therefore: The construction of both, business climate and people’s climate
are very important for the economic success of a functional region!
►
Most regional actors focus mainly on attracting companies and
improvement of business conditions -> business climate
►
But: For sustainable long-term regional growth, people‘s climate is as
important!
www.bakbasel.com