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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, Article 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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Related research

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

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References

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  1. Schneider, Hilmar & Zimmermann, Klaus F., 2010. "Agenda 2020: Strategies to Achieve Full Employment in Germany," IZA Policy Papers 15, Institute for the Study of Labor (IZA).
  2. 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, vol. 19(1), pages 118-138, February.
  3. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, vol. 96(3), pages 279-294.
  4. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-Time Work a Good Method to Keep Unemployment Down?," IZA Discussion Papers 5430, Institute for the Study of Labor (IZA).
  5. Christophe Hachon, 2010. "Do Beveridgian pension systems increase growth?," Journal of Population Economics, Springer, vol. 23(2), pages 825-831, March.
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Citations

Blog mentions

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
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Marco Caliendo & Jens Hogenacker, 2012. "The German labor market after the Great Recession: successful reforms and future challenges," IZA Journal of European Labor Studies, Springer, vol. 1(1), pages 1-24, December.
  2. Mühlemann, Samuel & Pfeifer, Harald, 2013. "The Structure of Hiring Costs in Germany: Evidence from Firm-Level Data," IZA Discussion Papers 7656, Institute for the Study of Labor (IZA).
  3. Werner Eichhorst & Verena Tobsch, 2013. "Has Atypical Work Become Typical in Germany?: Country Case Studies on Labour Market Segmentation," SOEPpapers on Multidisciplinary Panel Data Research 596, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Giuseppe Bertola, 2013. "Labor Market Policies and European Crises," CESifo Working Paper Series 4450, CESifo Group Munich.
  5. Anzelika Zaiceva & Klaus F. Zimmermann, 2013. "Returning Home at Times of Trouble? Return Migration of EU Enlargement Migrants during the Crisis," Center for Economic Research (RECent) 089, University of Modena and Reggio E., Dept. of Economics.
  6. Richard B. Freeman, 2013. "Failing the Test? The Flexible U.S. Job Market in the Great Recession," NBER Working Papers 19587, National Bureau of Economic Research, Inc.
  7. Eichhorst, Werner, 2012. "The Unexpected Appearance of a New German Model," IZA Discussion Papers 6625, Institute for the Study of Labor (IZA).
  8. Eichhorst, Werner, 2013. "Wie weiter am deutschen Arbeitsmarkt?," IZA Standpunkte 61, Institute for the Study of Labor (IZA).
  9. repec:mod:depeco:0008 is not listed on IDEAS
  10. Christian Dustmann & Bernd Fitzenberger & Uta Schönberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," CReAM Discussion Paper Series 1406, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  11. Zimmermann, Klaus F., 2013. "Labor Market Reforms and the Great Recession," IZA Policy Papers 75, Institute for the Study of Labor (IZA).
  12. Eichhorst, Werner & Tobsch, Verena, 2013. "Has Atypical Work Become Typical in Germany?," IZA Discussion Papers 7609, Institute for the Study of Labor (IZA).
  13. Rinne, Ulf & Zimmermann, Klaus F., 2013. "Is Germany the North Star of Labor Market Policy?," IZA Discussion Papers 7260, Institute for the Study of Labor (IZA).
  14. Elsner, Benjamin & Zimmermann, Klaus F., 2013. "10 Years After: EU Enlargement, Closed Borders, and Migration to Germany," IZA Discussion Papers 7130, Institute for the Study of Labor (IZA).
  15. Cahuc, Pierre & Carcillo, Stéphane & Rinne, Ulf & Zimmermann, Klaus F., 2013. "Youth Unemployment in Old Europe: The Polar Cases of France and Germany," IZA Discussion Papers 7490, Institute for the Study of Labor (IZA).
  16. Zimmermann, Klaus F., 2013. "Reflexionen zur Zukunft der Arbeit," IZA Standpunkte 56, Institute for the Study of Labor (IZA).
  17. Ritzen, Jo & Zimmermann, Klaus F., 2013. "A Vibrant European Labor Market with Full Employment," IZA Policy Papers 73, Institute for the Study of Labor (IZA).

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