Spatial Econometric Analysis of Regional Aging: Evidence From German Counties

ABSTRACT Regional demographic change is widely acknowledged to contribute to economic decline, making an understanding of the determinants of regional population aging crucial for designing effective policy interventions. However, research on these determinants remains limited, particularly at the sub‐national level. This gap is further compounded by challenges related to data availability and endogeneity in econometric studies. To address these issues, we analyse a county‐level panel dataset covering the period 2002–2022 for Germany. Our methodology incorporates spatial econometric techniques to account for unobserved heterogeneity and spatial spillover thereby mitigating potential bias. We carefully address remaining endogeneity concerns and conduct extensive robustness checks. Our findings indicate that new housing construction and educational attainment exert significant influences on the share of the population aged 65 and over, primarily through local, own‐county effects, whereas commuting flows operate mainly as cross‐county spatial spillovers. This empirical evidence not only deepens our understanding of the spatial determinants of regional aging but also highlights new avenues for targeted policy interventions, which we discuss in detail.