Mobility of agricultural labour and fluctuating regional labour markets: A demographic and economic analysis with application to West-Germany

Abstract

Summary The paper is an attempt to contribute to the actual question in how far the reduced economic growth and the lack of non-farm jobs affects the process of agricultural adjustment via a decline of the agricultural labour force. A demographic cohort model is specified to decompose the total rate of change of agricultural labour. It is applied to West-Germany at the national and state (‘Land’) level to quantify the historical rates of change resulting from aging, death, disability and early retirement, respectively. The remaining non-autonomous rate of change (occupational mobility) is then explained within an age-specific econometric model. Explanatory variables relate to the labour market situation, to income and to the national growth rate of GNP. The numerical results show clear interregional differences in the impact of regional labour markets, income differentials and age structures on level and structure of the total rate of change. In order to identify areas where rural labour market policies should have priority, a regional projection of autonomous natural rates of decline is presented at the ‘Kreis’ level. The results indicate that the projected autonomous rates vary from 1.2 to 3.6 per cent. The observed interregional differences of farm size structures and labour market situations do not in all cases compensate for these differences and, hence, call for counteracting regional and labour market policies in selected problem areas.