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Unemployment in Germany: Reasons and Remedies

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  • Norbert Berthold
  • Rainer Fehn

Abstract

This paper discusses the reasons for the dismal labor market performance of Germany over the last three decades along with potential remedies. It argues that labor market rigidities along with a generous welfare state in conjunction with certain changes in the economic environment are important in explaining this development but cannot solely account for it. Barriers to entrepreneurship, to setting up new firms and to innovations which are prevalent on goods and capital markets also play an important role in explaining the lackluster German economic performance of which rising unemployment is only one part. Comprehensive institutional reforms are therefore called for.

Suggested Citation

  • Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series 871, CESifo.
    • Handle: RePEc:ces:ceswps:_871
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    2. Berthold, Norbert & von Berchem, Sascha, 2003. "Job-AQTIV, Hartz, Agenda 2010: Aufbruch zu neuen Ufern oder viel Lärm um Nichts?," Discussion Paper Series 66, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    3. Berthold, Norbert & von Berchem, Sascha, 2003. "Die Sozialhilfe zwischen Effizienz und Gerechtigkeit: wie kann der Spagat gelingen?," Discussion Paper Series 62, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    4. Miltiades N. Georgiou & Nicholas Kyriazes, 2006. "Banking Entrepreneurship Differentials between Europe and USA. A Note," Papers on Entrepreneurship, Growth and Public Policy 2006-17, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    5. Pooe T. K., 2019. "Law and Economic Development in South Africa: An Assessment through the General Theory of Law and Development," The Law and Development Review, De Gruyter, vol. 12(2), pages 377-401, June.
    6. Klaus Heine & Karsten Mause, 2004. "Policy Advice as an Investment Problem," Kyklos, Wiley Blackwell, vol. 57(3), pages 403-427, August.
    7. Lerbs, Oliver, 2010. "Is there a link between home ownership and unemployment levels? Evidence from German regional data," CAWM Discussion Papers 34, University of Münster, Münster Center for Economic Policy (MEP).

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    Keywords

    unemployment; Germany; labor market reforms; venture capital; innovations;
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