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Economic reform and the political economy of the German welfare state

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  • Streeck, Wolfgang
  • Trampusch, Christine
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    Abstract

    The key to economic reform in Germany is a significant reduction in the high costs of labour.The main factor driving up German labour costs is the funding of the extensive German welfare state through social insurance contributions that in effect operate like payroll taxes on employment. The paper discusses the political causes of the rise in non-wage labour costs since the 1970s. It then proceeds to show how a variety of opportunities for political blockade in the German political economy dim the prospect for effective reform in the foreseeable future. -- Die Wiederherstellung der Leistungsfähigkeit der deutschen Volkswirtschaft erfordert vor allem eine Reduzierung der hohen Arbeitskosten. Diese werden zu einem erheblichen Teil durch die Beitragsfinanzierung des Sozialstaats verursacht. Die Sozialbeiträge wirken wie Steuern auf Beschäftigung. Das Papier untersucht, warum die Lohnnebenkosten seit den siebziger Jahren so stark gestiegen sind, und zeigt, wie eine Vielfalt von politischen Blockademöglichkeiten effektive Reformen auf absehbare Zeit unwahrscheinlich macht.

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    Bibliographic Info

    Paper provided by Max Planck Institute for the Study of Societies in its series MPIfG Working Paper with number 05/2.

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    Date of creation: 2005
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    Handle: RePEc:zbw:mpifgw:052

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    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.:
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    1. Ebbinghaus, Bernhard, 2008. "Reforming Early Retirement in Europe, Japan and the USA," OUP Catalogue, Oxford University Press, number 9780199553396, September.
    2. 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.
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    Cited by:
    1. Kemmerling, Achim & Neugart, Michael, 2009. "Financial market lobbies and pension reform," European Journal of Political Economy, Elsevier, vol. 25(2), pages 163-173, June.
    2. Eichhorst, Werner & Wintermann, Ole, 2005. "Generating Legitimacy for Labor Market and Welfare State Reforms: The Role of Policy Advice in Germany, the Netherlands, and Sweden," IZA Discussion Papers 1845, Institute for the Study of Labor (IZA).
    3. Ebbinghaus, Bernhard & Eichhorst, Werner, 2006. "Employment Regulation and Labor Market Policy in Germany, 1991-2005," IZA Discussion Papers 2505, Institute for the Study of Labor (IZA).
    4. Eichhorst, Werner, 2007. "The Gradual Transformation of Continental European Labor Markets: France and Germany Compared," IZA Discussion Papers 2675, Institute for the Study of Labor (IZA).
    5. Eichhorst, Werner & Kaiser, Lutz C., 2006. "The German Labor Market: Still Adjusting Badly?," IZA Discussion Papers 2215, Institute for the Study of Labor (IZA).
    6. Eichhorst, Werner, 2007. "Der Arbeitsmarkt in Deutschland: Zwischen Strukturreformen und sozialpolitischem Reflex," IZA Discussion Papers 3194, Institute for the Study of Labor (IZA).

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