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Das Entsendegesetz: Suendenfall oder Loesung des Arbeitslosigkeitsproblems?

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Author Info

  • Rotte, Ralph

    ()
    (RWTH Aachen University)

  • Zimmermann, Klaus F.

    ()
    (IZA and University of Bonn)

Abstract

In March 1996, the Bundestag introduced a minimum wage law for the German construction business in order to protect native workers from low wage competition by posted workers from other EU countries. This Entsendegesetz (Posted Workers Act) was backed formally by the EU Posted Workers Directive of December 1996. This paper analyzes the economic and political background of the law as well as its impact on the German construction business according to economic theory and provisional empirical evidence from similar protective measures taken in the U.S. The effectiveness of the law is seriously limited by practical and conceptional problems, like resource constraints in control, shifts from legal to illegal employment, or compatibility with basic EU law and principles. Moreover, since the central problems of the German construction business are structural, one cannot expect much of a relief for the labor market of native workers. Since the Entsendegesetz seems therefore only justifiable in the short run in order to smoothen structural adjustment and to avoid political unrest and xenophobia, it should not be extended.

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File URL: http://ftp.iza.org/dp8.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8.

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Length: 25 pages
Date of creation: May 1998
Date of revision:
Publication status: published in: Staatswissenschaften und Staatspraxis, 1998, 9 (2), 191-208; see IZA Reprints 4/99
Handle: RePEc:iza:izadps:dp8

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Related research

Keywords: labor market effects of immigration; construction business; immigration policy;

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References

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  1. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
  2. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  3. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September.
  4. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
  5. Volker Rußig, 1996. "Bauwirtschaft in Deutschland : beschleunigter Strukturwandel," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 49(25-26), pages 14-29, October.
  6. Machin, Stephen & Manning, Alan, 1996. "Employment and the Introduction of a Minimum Wage in Britain," Economic Journal, Royal Economic Society, vol. 106(436), pages 667-76, May.
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Citations

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Cited by:
  1. Volker Meier & Sonja Munz, 2008. "Beschäftigungseffekte von Mindestlöhnen unter Vernachlässigung der Hauptbetroffenen: Kommentar zu König und Möller," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 61(15), pages 30-32, 08.
  2. Rotte, Ralph, 1998. "Sorties from the Fortress: The Current System of Anti-Immigration Policy in Germany," IZA Discussion Papers 13, Institute for the Study of Labor (IZA).

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