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The Gradual Transformation of Continental European Labor Markets: France and Germany Compared

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  • Eichhorst, Werner

    ()
    (IZA)

Abstract

Germany and France are both Continental European welfare states with severe labor market problems such as low employment and high and persistent unemployment which can be explained by labor market institutions that inhibit labor market adaptability. This paper analyzes recent reforms in core areas such as active and passive labor market policies, employment protection and the funding of social policies through taxes and social security contributions in both countries. It shows if and to what extent more favourable conditions for employment growth could be created. The paper identifies the limits of partial reforms in terms of the creation of more efficient labor market institutions although these reforms are highly plausible in politico-economic terms. However, the cumulative effect of sequences of marginal changes leads to a gradual medium-term transformation of both Continental European labor markets.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2675.

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Length: 35 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2675

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Keywords: Germany; France; labor market institutions; institutional changes; political economy;

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References

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  1. repec:fth:iniesr:500 is not listed on IDEAS
  2. 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.
  3. Streeck, Wolfgang, 2003. "From state weakness as strength to state weakness as weakness: Welfare corporatism and the private use of the public interest," MPIfG Working Paper 03/2, Max Planck Institute for the Study of Societies.
  4. Olivier Blanchard, 2005. "European Unemployment: The Evolution of Facts and Ideas," NBER Working Papers 11750, National Bureau of Economic Research, Inc.
  5. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of Policy Complementarities," CEPR Discussion Papers 1963, C.E.P.R. Discussion Papers.
  6. Juan José Dolado & Carlos García-Serrano & Juan F. Jimeno, . "Drawing Lessons from the Boom of Temporary Jobs in Spain," Working Papers 2001-11, FEDEA.
  7. Eichhorst, Werner & Konle-Seidl, Regina, 2005. "The interaction of labor market regulation and labor market policies in welfare state reform," IAB Discussion Paper 200519, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Elena Stancanelli, 2004. "Evaluating the impact of the French tax credit programme: a difference in difference model," Documents de Travail de l'OFCE 2004-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  9. Cahuc, Pierre & Postel-Vinay, Fabien, 2002. "Temporary jobs, employment protection and labor market performance," Labour Economics, Elsevier, vol. 9(1), pages 63-91, February.
  10. Bernard Salanié & Guy Laroque, 2000. "Une décomposition du non-emploi en France," Économie et Statistique, Programme National Persée, vol. 331(1), pages 47-66.
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  12. Corinne Prost & Pauline Givord & Sophie Audric, 2000. "Estimation de l'impact sur l'emploi non qualifié des mesures de baisse de charges," Revue économique, Presses de Sciences-Po, vol. 0(3), pages 513-522.
  13. 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).
  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. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
  16. 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.
  17. 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.
  18. Eichhorst, Werner & Kaiser, Lutz C., 2006. "The German Labor Market: Still Adjusting Badly?," IZA Discussion Papers 2215, Institute for the Study of Labor (IZA).
  19. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  20. Pierre Cahuc, 2002. "A quoi sert la prime pour l'emploi ?," Revue Française d'Économie, Programme National Persée, vol. 16(3), pages 3-61.
  21. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, September.
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Citations

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Cited by:
  1. Daniel Fernández-Kranz & Núria Rodríguez-Planas, 2010. "The Part-Time Pay Penalty in a Segmented Labor Market," Working Papers 458, Barcelona Graduate School of Economics.
  2. Simonida Vucenov & Jelena Duran, 2012. "Institutional Prerequisites of Employment Policy andFunctioning of Labour Market," Book Chapters, Institute of Economic Sciences.
  3. Patrick Lunz, 2013. "What's left of the left? Partisanship and the political economy of labour market reform: why has the social democratic party in Germany liberalised labour markets?," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 5, London School of Economics / European Institute.
  4. Wolfgang Ochel, 2008. "The Political Economy of Two-tier Reforms of Employment Protection in Europe," CESifo Working Paper Series 2461, CESifo Group Munich.
  5. Patrick Lunz, 2013. "What's left of the left? Partisanship and the political economy of labour market reform: why has the social democratic party in Germany liberalised labour markets?," LEQS – LSE 'Europe in Question' Discussion Paper Series 65, European Institute, LSE.
  6. Farkas, Beáta, 2011. "A közép-kelet-európai piacgazdaságok fejlődési lehetőségei az Európai Unióban
    [The development opportunities for the Central-East European market economies within the European Union]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 412-429.

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