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dc.contributor.authorGeys, Bennyen_US
dc.contributor.authorHeinemann, Friedrichen_US
dc.contributor.authorKalb, Alexanderen_US
dc.description.abstractGerman municipalities are expected to suffer from (often significant) population losses in the upcoming decades. We assess these local governments? vulnerability to the fiscal consequences of this demographic decline through two means (using a sample of 1021 municipalities in the state of Baden-Württemberg). First, we consider local government cost efficiency. This indicates that there is a substantial divergence in efficiency despite a homogeneous institutional setting, leaving at least some – mainly smaller – municipalities vulnerable to adverse demographic/financial shocks. Secondly, we estimate the elasticity of local government cost functions to population size. We find that costs rise (fall) underproportionally with population size for small municipalities, whereas this is less the case for larger municipalities. This implies that especially small municipalities are vulnerable to increasing cost pressures under declining population. The overall implication is that large German municipalities (over 10.000 inhabitants) will more easily be able to cope with the expected population decline than smaller ones, supporting a case for boundary reviews or more extensive inter-communal cooperation.en_US
dc.publisher|aZentrum für Europäische Wirtschaftsforschung (ZEW) |cMannheimen_US
dc.relation.ispartofseries|aZEW Discussion Papers |x07-036en_US
dc.subject.keywordDemographic changeen_US
dc.subject.keywordLocal government performanceen_US
dc.subject.keywordStochastic frontier analysisen_US
dc.subject.keywordEconomies of scaleen_US
dc.subject.keywordCost elasticityen_US
dc.titleLocal Governments in the Wake of Demographic Change: Efficiency and Economies of Scale in German Municipalitiesen_US
dc.typeWorking Paperen_US

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