www.bakbasel.com dr. tina haisch, economist, bak basel economics ga 2008 assembly of european...
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Dr. Tina Haisch, Economist, BAK Basel Economics
GA 2008Assembly of European Regions (AER)
Open Space – International Speaker‘s CornerNov 13th 2008, Tampere
Migration: Building regional advantage
www.bakbasel.com
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
Content
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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 CountriesBusiness Sectors – Not Only Macro Level
Time series for800 regions in24 countries
NUTS1 to NUTS3
45 industry sectors (NACE). In selected industries more details (Life Sciences, Finance, Technology, Tourism)
CountriesRegions
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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
Building regional advantage
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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.)
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
Silicon Valley, CA, USA
Cologne city beach, Germany
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Quality of Life
Concept: Explaining employment and economic performance
Migration Governance
Innovation
Regulation
Accessibility
Taxation
Economic performance of regions
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Interaction between migration and economic growth
Migration
• Students• Alumnis• etc.
• Refugees• Asylum seekers• etc.
• Migrant labour• Expatriates• etc.
Political attractiveness Economic attractivenessOther attractiveness
Attractiveness of regions and countries
• Stability• Institutions (laws, immigration policy etc.)
• Accessibility• Quality of life• etc.
• Performance• Employment• Taxation
• GDP• Employment (jobs)
Attractiveness of regions and countries
• Taxation• Regulation
• Productivity• Job vacancy
• Quality of life• Innovation resources • etc.
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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?
Questions to be answered with regard to regional advantage
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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
Method
Source: BAK Basel Economics
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Relation of economic performance and people
Oresund
Boston
Los Angeles
San Diego
San Francisco
Glasgow
Edinburgh
London
Birmingham
Liverpool
Manchester
GöteborgStockholmHelsinki
Genf
Lissabon
WienStavanger
Oslo
Amsterdam
Luxemburg
Neapel
Rom
Milano
Dublin
MarseilleParis
Lyon
Nancy
Madrid
Barcelona
Athen
Köln
FrankfurtBerlin
München
Stuttgart Arhus
Antw erpen
Brüssel
r = 0.4
-1%
0%
1%
1%
2%
2%
-1% 0% 1% 2% 3% 4% 5%
real GDP growth 2001-2006
po
pu
lati
on
gro
wth
20
01
-20
06
Source: BAK Basel Economics
www.bakbasel.com
Relation of jobs and people
Oresund
Boston
Los Angeles
San Diego
San Francisco
Glasgow
Edinburgh
London
Birmingham
Liverpool
Manchester Göteborg
Stockholm
Helsinki
Genf
Lissabon
Wien
Stavanger
Oslo
Amsterdam
Luxemburg
Neapel
Rom
Milano
Dublin
Marseille
Paris
Lyon
Nancy
Madrid
Barcelona
Athen
KölnFrankfurt
Berlin
München
Stuttgart
Arhus
Antw erpen
Brüssel
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
-0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
employment growth 2001-2006
po
pu
lati
on
gro
wth
200
1-20
06
r = 0.52
Source: BAK Basel Economics
www.bakbasel.com
Economic performance and employment (jobs)
Correlation (employment growth (t+i); GDP growth (t))
-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
maximum
95%-percentile
median
5%-percentil
minimum
Economic performance today affects employment growth todayEconomic performance affects employment growth one year later
Source: BAK Basel Economics
www.bakbasel.com
Economic performance and migration
Correlation (GDP growth (t+i) ; population growth (t))
-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
Maximum
95%-Per centi l
Medi an
5%-Per centi l
Mi nimum
Migration today results from economic growth in the last 4 years.
Source: BAK Basel Economics
www.bakbasel.com
Correlation (employment growth (t+i) ; population growth (t))
-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
Maximum
95%-Percentil
Median
5%-Percentil
Minimum
Employment and migration
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
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..and after testing for significance (Granger causality):
1. Is economic performance the driver of migration or is migration the driver of economic performance?
-> Economic performance is the driver of migration!
2. Do people follow jobs or do jobs follow people?
-> In the short run: people follow jobs-> but in the long run jobs also follow people
Log (population) causes Log (GDP) Log (GDP) causes Log (population)Lags Lags
alpha 1 2 3 4 5 6 7 8 alpha 1 2 3 4 5 6 7 85% 5 11 12 6 6 5 3 3 5% 26 16 12 10 9 7 6 3
Log (population) causes Log (employment) Log (employment) causes Log (population)Lags berücksichtigte Lags
alpha 1 2 3 4 5 6 7 8 alpha 1 2 3 4 5 6 7 85% 8 15 11 9 10 10 7 3 5% 21 7 8 10 7 6 5 2
Source: BAK Basel Economics
www.bakbasel.com
Conclusions: Lessons learned from the data
Employment Growth
Population Growth = Migration
Economic Growtheffects with a time lag of ~ 1 year
effect with a time lag of ~ 4 years
Employment Growth
effects with a time lag of ~ 2 - 6 years
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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!
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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!