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The Post-Unification German Labor Market

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Author Info

  • Bonin, Holger

    ()
    (ZEW Mannheim)

  • Zimmermann, Klaus F.

    ()
    (IZA and University of Bonn)

Abstract

This study surveys the development of the East German labor market after the unification of Germany. We explain that in the last decade, East Germans were faced with very high levels of joblessness that considering labor market exits and active labor market policy, are only partly reported as unemployment. A review of the evidence on the effectiveness of labor market policies suggests that job creation and training programs did not substantially promote reemployment, though they may have alleviated social burdens from unemployment. Discussing what causes the high unemployment in the east, we claim that effects of wage policy have been overrated. Differences in unemployment rates are also the result of more ample labor supply. We show that employment levels in the east have almost converged on western standards. The structure of employment, however, differs. Shortage of part-time work, service jobs and independent employment indicates that East Germany has failed to develop a service economy. We argue that unqualified adaptation to western procedures aggravated the investment and employment problem in the east.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 185.

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Length: 37 pages
Date of creation: Aug 2000
Date of revision:
Publication status: published in: R. T. Riphahn/ D. J. Snower / K. F. Zimmermann (Eds.), Employment Policy in Transition : The Lessons of German Integration for the Labor Market, Springer Verlag, 2001, 8-30; see IZA Reprints 66/00
Handle: RePEc:iza:izadps:dp185

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Keywords: transitional economies; East Germany; unemployment;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Cahuc, Pierre & Zylberberg, André, 2000. "Redundancy payments, incomplete labor contracts, unemployment and welfare," CEPREMAP Working Papers (Couverture Orange) 0006, CEPREMAP.
  2. Francis Breedon & Paul Fisher, 1993. "M0: Causes and Consequences," Bank of England working papers 20, Bank of England.
  3. Brunello, Giorgio & Graziano, Clara & Parigi, Bruno, 2000. "Ownership or Performance: What Determines Board of Directors' Turnover in Italy?," IZA Discussion Papers 105, Institute for the Study of Labor (IZA).
  4. repec:iza:izadps:102 is not listed on IDEAS
  5. Husted, Leif & Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," IZA Discussion Papers 101, Institute for the Study of Labor (IZA).
  6. Pierre Cahuc & André Zylberberg, 1999. "Job Protection, Minimum Wage and Unemployment," Working Papers 99-38, Centre de Recherche en Economie et Statistique.
  7. Barrett, Alan, 1999. "Irish Migration: Characteristics, Causes and Consequences," IZA Discussion Papers 97, Institute for the Study of Labor (IZA).
  8. van der Klaauw, Bas & van Ours, Jan C., 2000. "Labor Supply and Matching Rates for Welfare Recipients: An Analysis Using Neighborhood Characteristics," IZA Discussion Papers 102, Institute for the Study of Labor (IZA).
  9. Ridder, G & van Ours, Jan C, 2000. "Fast Track or Failure: A Study of the Completion Rates of Graduate Students in Economics," CEPR Discussion Papers 2363, C.E.P.R. Discussion Papers.
  10. Haisken-DeNew, John P. & Schmidt, Christoph M., 1999. "Industry Wage Differentials Revisited: A Longitudinal Comparison of Germany and USA (1984-1996)," IZA Discussion Papers 98, Institute for the Study of Labor (IZA).
  11. Wright, Robert E., 1999. "The Rate of Return to Private Schooling," IZA Discussion Papers 92, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Puhani, Patrick A., 2001. "Wage Rigidities in Western Germany? Microeconometric Evidence from the 1990s," IZA Discussion Papers 334, Institute for the Study of Labor (IZA).
  2. Bonin, Holger & Euwals, Rob, 2001. "Participation Behavior of East German Women after German Unification," IZA Discussion Papers 413, Institute for the Study of Labor (IZA).
  3. Andersson, Fredrik & Konrad, Kai A, 2001. "Globalization and Human Capital Formation," CEPR Discussion Papers 2657, C.E.P.R. Discussion Papers.
  4. Marcus Klemm, 2012. "Job Security and Fertility: Evidence from German Reunification," Ruhr Economic Papers 0379, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Snower, Dennis J. & Merkl, Christian, 2006. "The Caring Hand that Cripples: The East German Labor Market After Reunification (Detailed Version)," IZA Discussion Papers 2066, Institute for the Study of Labor (IZA).
  6. Klaus F. Zimmermann, 2001. "Perspektiven für mehr Jobs in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 2(4), pages 359-362, November.
  7. Zoë Kuehn, 2010. "Migration, wages, and parental background: Obstacles to entrepreneurship and growth in East Germany," Working Papers 2010-08, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 01 Sep 2011.
  8. Alexandra Fedorets, 2011. "Changes in Occupational Demand Structure and their Impact on Individual Wages," SFB 649 Discussion Papers SFB649DP2011-075, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

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