Abbau von Inflexibilitäten auf dem Arbeitsmarkt - Ist die Wirtschaftspolitik auf dem richtigen Weg?

The situation on the German labour market is still a catastrophe. The institutional set-ups on the labour market and the welfare state obviously no longer fit the fundamentally changed economic environment. There is next to no competition on the labour market and unions and employers' associations use the generous welfare state to transfer the burden of adjustment to changes in the economic environment onto the public at large. Institutional mismatch is prevalent. The red-green coalition government has not only realized that persistently high unemployment inflicts tremendous economic damage but that it is also politically destabilizing. It has therefore announced that the performance on the labour market during its term of office shall be its own measure of success or failure. This paper discusses whether the regulatory steps taken by the red-green coalition government, like implementing stricter employment protection legislation, reintroducing full pay when sick, and changing the law concerning low-paid jobs, are suitable for reducing this institutional mismatch. Copyright Verein fü Socialpolitik und Blackwell Publishers Ltd 2000