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Another Economic Miracle? The German Labor Market and the Great Recession

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Author Info

  • Rinne, Ulf

    ()
    (IZA)

  • Zimmermann, Klaus F.

    ()
    (IZA and University of Bonn)

Abstract

The mild response of the German labor market to the worst global recession in post-war history appears as an economic miracle. In response to the crisis, Germany has shown to be a strong case of internal flexibility. We argue that important factors that have contributed to this development include the strong position of the German economy due to recent labor market reforms, the nature of the crisis affecting mainly export-oriented companies in Germany, the extension of short-time work, the behavior of social partners, and automatic stabilizers. Among these factors, we emphasize the key role of the interaction between short-time work and long-term shortages of skilled workers in sectors and regions that were particularly affected by the crisis. Although the German experience is in stark contrast to that in the United States, we identify and discuss three challenges that will be at the center of debate on both sides of the Atlantic in the future.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6250.

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Length: 29 pages
Date of creation: Dec 2011
Date of revision:
Publication status: published in: IZA Journal of Labor Policy, 2012, 1:3, [Open Access] ; reprinted as 'Un altro miracolo economico? Il mercato del lavoro tedesco e la grande recessione' in: Diritto delle Relazioni Industriali, 2013, 23 (2), 401-423
Handle: RePEc:iza:izadps:dp6250

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Keywords: economic crisis; Germany; short-time work; unemployment; labor market institutions; internal flexibility;

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References

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  1. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2012. "Distributional consequences of labor-demand shocks: the 2008–2009 recession in Germany," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 118-138, February.
  2. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8214, C.E.P.R. Discussion Papers.
  3. Eichhorst, Werner & Grienberger-Zingerle, Maria & Konle-Seidl, Regina, 2006. "Activation Policies in Germany: From Status Protection to Basic Income Support," IZA Discussion Papers 2514, Institute for the Study of Labor (IZA).
  4. Alan Krueger & Jorn-Steffen Pischke, 1997. "Observations and Conjectures on the U.S. Employment Miracle," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 769, Princeton University, Department of Economics, Industrial Relations Section..
  5. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, Elsevier, vol. 96(3), pages 279-294.
  6. Karl BRENKE & Ulf RINNE & Klaus F. ZIMMERMANN, 2013. "Short-time work: The German answer to the Great Recession," International Labour Review, International Labour Organization, International Labour Organization, vol. 152(2), pages 287-305, 06.
  7. Schneider, Hilmar & Zimmermann, Klaus F., 2010. "Agenda 2020: Strategies to Achieve Full Employment in Germany," IZA Policy Papers, Institute for the Study of Labor (IZA) 15, Institute for the Study of Labor (IZA).
  8. Christophe Hachon, 2010. "Do Beveridgian pension systems increase growth?," Journal of Population Economics, Springer, Springer, vol. 23(2), pages 825-831, March.
  9. Eichhorst, Werner & Zimmermann, Klaus F, 2007. "And Then There Were Four... How Many (and Which) Measures of Active Labour Market Policy Do We Still Need?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6246, C.E.P.R. Discussion Papers.
  10. Eichhorst, Werner & Marx, Paul, 2009. "Reforming German Labor Market Institutions: A Dual Path to Flexibility," IZA Discussion Papers 4100, Institute for the Study of Labor (IZA).
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Another Economic Miracle? The German Labor Market and the Great Recession
    by maximorossi in NEP-LTV blog on 2012-01-31 13:50:17
  2. Another Economic Miracle? The German Labor Market and the Great Recession
    by maximorossi in NEP-LTV blog on 2012-01-31 13:50:17
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