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The German Labor Market: Still Adjusting Badly?

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  • Eichhorst, Werner

    ()
    (IZA)

  • Kaiser, Lutz C.

    ()
    (North Rhine-Westphalia University of Applied Sciences)

Abstract

In the late nineties, Germany was often seen as a laggard with respect to labor market and welfare state reforms with institutional inertia being reflected in notoriously sluggish employment growth and rising unemployment. Recent years, however, saw a complex sequence of reforms with regard to labor market-related institutions such as labor market regulation, social benefits, active and activating labor market policies and attempts to reduce the burden of payroll taxes and – last but not least – a series of changes in collective bargaining. The paper shows if and to what extent labor-market related reforms in Germany have in fact contributed to overcoming structural weaknesses of a Continental European ‘welfare state without work’ and creating an institutional setup more conducive to strong employment growth and lower unemployment. We provide a detailed institutional analysis of the most relevant reforms in both public policies and collective bargaining and evaluate their effects on labor market structures and dynamics that can be identified so far. In particular we focus on the development of different types of employment and raise the question whether these upcoming non-standard forms of employment may be sustainable with respect to the future of the German labor market.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2215.

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Length: 40 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2215

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Keywords: labor market reforms; labor market policy; Germany;

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References

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  1. Ebbinghaus, Bernhard & Hassel, Anke, 1999. "Striking deals: Concertation in the reform of continental European welfare states," MPIfG Discussion Paper 99/3, Max Planck Institute for the Study of Societies.
  2. repec:iab:iabzaf:v:38:i:2/3:p:284-304 is not listed on IDEAS
  3. Orszag, Mike & Snower, Dennis J., 1999. "Anatomy of Policy Complementarities," IZA Discussion Papers 41, Institute for the Study of Labor (IZA).
  4. Gerlach, Knut & Stephan, Gesine, 2005. "Wage distributions by wage-setting regime," IAB Discussion Paper 200509, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Eichhorst, Werner & Konle-Seidl, Regina, 2005. "The Interaction of Labor Market Regulation and Labor Market Policies in Welfare State Reform," IZA Discussion Papers 1718, Institute for the Study of Labor (IZA).
  6. Kemmerling, Achim & Bruttel, Oliver, 2005. "New politics in German labour market policy? The implications of the recent Hartz reforms for the German welfare state," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2005-101, Social Science Research Center Berlin (WZB).
  7. Gernandt, Johannes & Pfeiffer, Friedhelm, 2006. "Rising Wage Inequality in Germany," ZEW Discussion Papers 06-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of policy complementarities," Open Access Publications from Kiel Institute for the World Economy 2252, Kiel Institute for the World Economy (IfW).
  9. Jacobi, Lena & Kluve, Jochen, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," IZA Discussion Papers 2100, Institute for the Study of Labor (IZA).
  10. Nicola Brandt & Jean-Marc Burniaux & Romain Duval, 2005. "Assessing the OECD Jobs Strategy: Past Developments and Reforms," OECD Economics Department Working Papers 429, OECD Publishing.
  11. Eichhorst, Werner, 2006. "Beschäftigung Älterer in Deutschland: Der unvollständige Paradigmenwechsel," IZA Discussion Papers 1985, Institute for the Study of Labor (IZA).
  12. Schnabel, Claus, 2005. "Gewerkschaften und Arbeitgeberverbände: Organisationsgrade, Tarifbindung und Einflüsse auf Löhne und Beschäftigung," Discussion Papers 34, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  13. Eichhorst, Werner & Zimmermann, Klaus F., 2006. "Durchmarsch oder Richtungswechsel bei der Beschäftigungspolitik?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1998 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 86(7), pages 441-448.
  14. Karl Brenke, 2006. "Wachsender Niedriglohnsektor in Deutschland: sind Mindestlöhne sinnvoll?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 73(15/16), pages 197-206.
  15. Boss, Alfred & Christensen, Björn & Schrader, Klaus, 2005. "Anreizprobleme bei Hartz IV: Lieber ALG II statt Arbeit?," Kiel Discussion Papers 421, Kiel Institute for the World Economy (IfW).
  16. repec:fth:iniesr:500 is not listed on IDEAS
  17. Streeck, Wolfgang & Trampusch, Christine, 2005. "Economic reform and the political economy of the German welfare state," MPIfG Working Paper 05/2, Max Planck Institute for the Study of Societies.
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Cited by:
  1. Francesco D'Amuri & Gianmarco I. P. Ottaviano & Giovanni Peri, 2008. "The Labor Market Impact of Immigration in Western Germany in the 1990's," Temi di discussione (Economic working papers) 687, Bank of Italy, Economic Research and International Relations Area.
  2. Eichhorst, Werner, 2007. "The Gradual Transformation of Continental European Labor Markets: France and Germany Compared," IZA Discussion Papers 2675, Institute for the Study of Labor (IZA).
  3. Ebbinghaus, Bernhard & Eichhorst, Werner, 2006. "Employment Regulation and Labor Market Policy in Germany, 1991-2005," IZA Discussion Papers 2505, Institute for the Study of Labor (IZA).

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