Tuesday, December 05, 2006

Demographic Change - a note on Germany

I apologise to those who may have got several feeds on the Pacific story. Unfortunately there was some corruption with the story including loss of a photo that I was trying to fix.

A little while ago I noticed a story on the Demography matters blog linking Germany's poor economic growth to its demographic structure and especially its aging population. The same story also noted that Germany was suffering net migration among its young and especially its professionals.

I was puzzled by the second. Conventional wisdom states that aging population will widen opportunities for the young. Why, then, are they leaving?

A German reporter explained it to me this way.

Slow economic growth means that the overall pool of opportunities is not rising. Germany is also facing major competitive problems forcing economic restructuring.

Because older workers are well entrenched their existing conditions tend to be preserved, with restructuring and associated changes in working conditions focused on new entrants. This means that the young do not get the same conditions as their elders upon entry, while their career advancement is blocked off. So they are leaving.

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