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The German Labor Market: Still Adjusting Badly?

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Author Info
Werner Eichhorst () (IZA Bonn)
Lutz C. Kaiser () (IZA Bonn, DIW Berlin and EPAG)

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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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Publisher 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
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Handle: RePEc:iza:izadps:dp2215

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

Other versions of this item:

Find related papers by JEL classification:
J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy

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References listed on IDEAS
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.:
  1. Orszag, J. Michael & Snower, Dennis J., 1998. "Anatomy of Policy Complementarities," Working Paper Series 500, Research Institute of Industrial Economics.
    Other versions:
  2. Lena Jacobi & Jochen Kluve, 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). [Downloadable!]
  3. Jochen Kluve & Lena Jacobi, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," RWI Discussion Papers 0041, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
  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]. [Downloadable!]
  5. Johannes Gernandt & Friedhelm Pfeiffer, 2006. "Rising Wage Inequality in Germany," Working Papers of the Research Group Heterogenous Labor 06-12, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim. [Downloadable!]
    Other versions:
  6. Karl Brenke, 2006. "Wachsender Niedriglohnsektor in Deutschland: sind Mindestlöhne sinnvoll?," Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 73(15/16), pages 197-206. [Downloadable!]
  7. Werner Eichhorst & Regina Konle-Seidl, 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). [Downloadable!]
    Other versions:
  8. Werner Eichhorst, 2006. "Beschäftigung Älterer in Deutschland: Der unvollständige Paradigmenwechsel," IZA Discussion Papers 1985, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Nicola Brandt & Jean-Marc Burniaux & Romain Duval, 2005. "Assessing the OECD Jobs Strategy: Past Developments and Reforms," OECD Economics Department Working Papers 429, OECD, Economics Department. [Downloadable!]
Full references

Cited by:
(explanations, 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.)

  1. Werner Eichhorst, 2007. "The Gradual Transformation of Continental European Labor Markets: France and Germany Compared," IZA Discussion Papers 2675, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Bernhard Ebbinghaus & Werner Eichhorst, 2006. "Employment Regulation and Labor Market Policy in Germany, 1991-2005," IZA Discussion Papers 2505, Institute for the Study of Labor (IZA). [Downloadable!]
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This page was last updated on 2009-12-14.


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