An interregional labour market model incorporating vacancy chains and social security

This paper deals with three aspects of interregional demo-economic models which are important with respect to the analysis of regional labour market developments. First, attention is paid to forecasts of the exogenous regional variables, such as investments, exports, etc. Because data at the regional level are usually scarce, it is suggested to make these projections by means of a top-down model. Second, the social security sector is incorporated in the model framework, because changes in social security benefits, which are common in many Western countries nowaday, usually have substantial impacts on regional economic and demographic structures. Third, a vacancy chain model instead of a simple employment growth equation is tied to the standard demo-economic model framework. In this way not only employment growth but also migration, job mobility and related income effects can be taken into account.