A SPATIAL OLG MODEL OF REGIONAL RISK: PRODUCTIVITY, MOBILITY, HOUSING AND PENSION TRANSFERS

Анотація

Purpose. This study aims to develop an advanced dynamic spatial theoretical framework capable of capturing the interactions among regional security conditions, labour mobility, housing-market rigidity, and intergenerational fiscal mechanisms under asymmetric shocks and conflict-related risks. The model is designed to reveal how spatial risk affects the behaviour of economic agents, shapes regional labour-market outcomes and determines the long-run spatial equilibrium of an economy undergoing profound structural disruptions. Methodology. The research employs a dynamic spatial overlapping-generations (OLG) model in which individuals optimise choices regarding location, consumption, savings and migration. The model formalises the influence of a regional risk index on productivity, wages, rental prices, locational attractiveness and the functioning of the PAYG pension system. Analytical derivations, including intermediate proofs, demonstrate how security risk monotonically affects key macroeconomic variables and ensure the existence of a dynamic spatial equilibrium with endogenous migration flows. Results. The findings show that reductions in regional risk increase effective productivity, raise wages, stimulate inflows of young workers and heighten pressure on inelastic housing markets, producing persistent spatial differentials in rents and wages. Short-run housing rigidity is shown to amplify regional disparities and delay the convergence of economic conditions. The study further establishes that shifts in the spatial allocation of labour alter the fiscal balance of the PAYG pension system, generating new interregional distributional tensions. Scientific novelty. The study introduces a fully integrated framework in which the security indicator simultaneously acts as an amenity, a productivity determinant and a discount factor in housing valuation. This enables the identification of a coherent “security multiplier” mechanism that transmits conflict-related shocks through all major markets in the spatial economy. Practical significance. The results provide a theoretically grounded foundation for designing post-war recovery strategies, including housing and transport policies, regional development programmes, and pension system reforms. They may also support forecasting exercises and scenario modelling for Ukraine’s long-term spatial recovery under varying security trajectories.

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