Regionalisation of demographic and economic projections
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1 Regionalisation of demographic and economic projections Pilar Vizcaino Martinez Filipe Batista e Silva Lewis Dijkstra Carlo Lavalle Sevilla, September Joint Research Centre the European Commission's in-house science service
2 Regionalisation model What Regionalisation: Downscaling of projected macro variables (GDP, employment, population) from country to regional level. Ensuring full consistency with the country totals from the reference projections. Why Demographic and economic projections are available only at national level: for policy assessments in domains with a strong territorial dimension, this is not sufficient. 2
3 Regionalising the 2015 Ageing Report s projections: Input data: Historical ( ) data per NUTS3 from Eurostat. Projections ( ): DG ECFIN projections on GDP and employment at national level: 2015 Ageing Report (EC 2015) Eurostat population projections at NUTS3: Europop 2013 Are based on assumptions but do not consider specific policies 3
4 Regional growth scenarios: 1. Trend scenario: Employment and GDP Projected independently; Sector growth rates start regionally in 2015 and gradually shift to the national rates by Population Taken from ESTAT at NUTS3 4
5 GVA growth rates ( ) per sector, NUTS0, NUTS3 5
6 Regionalisation model: current setup (*) The model includes a set of linked equations, integrating assumptions regarding future regional growth, and estimated in a dynamic and recursive fashion. 6 (*) Component of the LUISA Territorial Modelling Platform
7 2. Convergence model Input data: Historical data at NUTS3 level. Projections at NUTS0 level. Assumptions: Growth assumptions: GDP/capita and Productivity converge. Employment growth is a function of GDP/capita growth and productivity growth. People follow jobs.
8 First iteration t=2011 GDP/capita Employment Population 1 GDP/cap t,r GDP/cap t:t+n,r Convergence function I 2 P t,r = GDP t, / E t,r Convergence function II 4 R t,r = E t,r / Pop t,r R c,t:t+n = R t+n,c / R t,c P t:t+n,r R t+n,r = R t,r * R c,t:t+n GDP/cap t+n,r 3 E t+n,r = E t,r * ( GDP/cap t:t+n,r / P t:t+n,r ) 5 Pop t+n,r = E t+n,r / R t+n,r E t+n,c (ECFIN) Pop t+n,c (ESTAT) Rescaled E t+n,r Rescaled Pop t+n,r 1. Convergence of GDP/capita; 2. Convergence of productivity; 3. Total employment is predicted based on the difference between growth of GDP/capita and growth of productivity; 4. Calculation of future regional ratios of Employment to Population; 5. People follow jobs (more jobs = more people); 6. GDP is determined by multiplying population with GDP/cap; 7. Final GDP/cap productivity are calculated and used in the next iteration. GDP 6 GDP t+n,r = GDP/cap t+n,r * Pop t+n,r GDP t+n,c (ESTAT) Rescaled GDP t+n,r GDP/capita & productivity GDP/cap t+n,r = GDP t+n,r / Pop t+n,r 7 P t+n,r = GDP t+n,r / E t+n,r Next iteration
9 EU outlook: trends Base year 2010 Trend sc Conv. sc GDP per capita and productivity tend to catch-up with time in both scenarios, but the effect is considerably more marked in the convergence scenario 9
10 EU outlook: trends Under the convergence scenario transition and less developed regions account for a higher share of the total GDP, employment and population in 2060 than what the trend scenario would warrant. Employment and population growth is particularly different between scenarios and typology of regions and the behaviour is constrained by the imposed reference projections. Still a more pronounced catch-up effect is visible in the convergence scenario.
11 EU outlook: eligibility Cumulative increase of NUTS2 regions per type of region Trend scenario Convergence scenario Increase of less developed regions in the trend scenario, and additional pressure on cohesion policies. Significant reduction of less developed regions in the convergence scenario.
12 Lagging regions 2015 = 1 Trend scenario Convergence scenario 12
13 KNOWLEDGE BASE LUISA Modelling Platform structure MACRO PROJECTIONS POLICY AND REGULATORY CONSTRAINTS ECONOMY (GEM-E3, RHOMOLO) DEMOGRAPHY (EUROPOP) AGRICULTURE (CAPRI) ENERGY (JRC-EU-TIMES) REGIONAL MODULE THEMATIC DBs (SOCIAL, TRANSPORT & ENERGY INFRASTR.) ALLOCATION MODULE Growth scenarios Migration Spatial spillovers CURRENT & PAST LAND USES (SATELLITE IMAGERY & INTERPRETED MAPS) LOCAL SUITABILITY IMPACT ANALYSIS Regions & cities Dynamic Population Land use & Population ecosystems Activities Dynamic Spatial Allocation Accessibility Energy THEMATIC MODELS (LISFLOOD, ESTIMAP, RIAT, CBM, BIOMA) WEB PLATFORMS
14 Planned developments for Regional Module Determinants of growth (eg. human capital) Growth assumptions Cohesion policy (e.g. link with RHOMOLO) GDP/capita Productivity Exogenous economic and population projections (ECFIN, ESTAT, NUTS0) Switch on/off national constraints Employment Migration Population Spatial spill overs Residential demand GDP Industrycommerce land demand NUTS3 projections Allocation module
15 Determinants of growth Human capital; Quality of Government [Index]; Spatial spill-overs; Urban agglomerations (e.g. size of population, urban density); Other fixed effects (e.g. countries, capital regions); Regional Specialisation and Innovation Strategies; Cohesion Policy (i.e. RHOMOLO).
16 Conclusions: The regionalization method can be used to envisage and quantify impacts of rather diverse regional development pathways. Further refinements will include new alternative reference projections, more explicit determinants of regional growth and will take into account expected effects of regional strategies. As such, can contribute to support territorial impact assessments allocating spatially impacts of scenarios and policy options.
17 Thank you!
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