The Unexpected Appearance of a New German Model
AbstractMost Continental European labour markets and welfare states underwent a substantial transformation over the last two decades moving from a situation of low employment and limited labour market inequality to higher employment, but also more inequality. Germany is a case in point as it exhibits growing employment figures and growing shares of low pay and non-standard work. Furthermore, the German labour market has been remarkably resilient during the recent crisis. How can this be explained? The paper claims that changes in labour market institutions such as unemployment benefits, active labour market policies and employment protection play a major role, but changes in industrial relations at the sectoral level and individual firms' staffing practices are equally important in explaining actual labour market outcomes. Regarding labour market institutions, the pattern found in Germany shows sequences of de- and re-regulatory reforms of employment protection and increasing or decreasing unemployment benefit generosity, both mostly addressing the margins of the labour market, i.e. 'outsiders', and contributing to a growing dualisation of the employment system. The institutional status of 'insiders' was hardly affected by legislative changes. This dualisation trend was reinforced by micro-level dynamics in industrial relations and company employment practices where we can observe growing reliance on mechanisms of internal flexibility for the skilled core work force and increasing use of non-standard types of employment in less specifically skilled occupations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6625.
Length: 26 pages
Date of creation: Jun 2012
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-EEC-2012-06-25 (European Economics)
- NEP-EUR-2012-06-25 (Microeconomic European Issues)
- NEP-IUE-2012-06-25 (Informal & Underground Economics)
- NEP-LAB-2012-06-25 (Labour Economics)
- NEP-LMA-2012-06-25 (Labor Markets - Supply, Demand, & Wages)
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.:
- Eichhorst, Werner & Marx, Paul & Tobsch, Verena, 2009. "Institutional Arrangements, Employment Performance and the Quality of Work," IZA Discussion Papers 4595, Institute for the Study of Labor (IZA).
- Ulf Rinne & Klaus Zimmermann, 2012.
"Another economic miracle? The German labor market and the Great Recession,"
IZA Journal of Labor Policy,
Springer, vol. 1(1), pages 1-21, December.
- Rinne, Ulf & Zimmermann, Klaus F., 2011. "Another Economic Miracle? The German Labor Market and the Great Recession," IZA Discussion Papers 6250, Institute for the Study of Labor (IZA).
- Spermann, Alexander, 2011. "The New Role of Temporary Agency Work in Germany," IZA Discussion Papers 6180, Institute for the Study of Labor (IZA).
- 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).
- Werner Eichhorst & Michael Feil & Paul Marx, 2010.
"Crisis, What Crisis? Patterns of Adaptation in European Labor Markets,"
Applied Economics Quarterly (formerly: Konjunkturpolitik),
Duncker & Humblot, Berlin, vol. 61(Supplemen), pages 29-64.
- Eichhorst, Werner & Feil, Michael & Marx, Paul, 2010. "Crisis, What Crisis? Patterns of Adaptation in European Labor Markets," IZA Discussion Papers 5045, Institute for the Study of Labor (IZA).
- 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).
- Konle-Seidl, Regina & Eichhorst, Werner & Grienberger-Zingerle, Maria, 2007. "Activation policies in Germany : from status protection to basic income support," IAB Discussion Paper 200706, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Carlin, W.J. & Soskice, D., 2009. "German economic performance: disentangling the role of supply-side reforms, macroeconomic policy and coordinated economy institutions," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Eichhorst, Werner & Marx, Paul, 2010. "Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States," IZA Discussion Papers 5035, Institute for the Study of Labor (IZA).
- Hemerijck, Anton & Eichhorst, Werner, 2009. "Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms," IZA Discussion Papers 4085, Institute for the Study of Labor (IZA).
- Giuseppe Bertola & John Driffill & Harold James & Hans-Werner Sinn & Jan-Egbert Sturm & Ákos Valentinyi, 2013. "Chapter 3: Labour Market Reform and Youth Unemployment," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 73-94, 02.
- Card, David & Heining, Jörg & Kline, Patrick, 2012.
"Workplace heterogeneity and the rise of West German wage inequality,"
IAB Discussion Paper
201226, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 967-1015.
- David Card & Jörg Heining & Patrick Kline, 2012. "Workplace Heterogeneity and the Rise of West German Wage Inequality," NBER Working Papers 18522, National Bureau of Economic Research, Inc.
- Card, David & Heining, Jörg & Kline, Patrick, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," IZA Discussion Papers 7200, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.