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Another economic miracle? The German labor market and the Great Recession

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  • Ulf Rinne

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  • Klaus Zimmermann

    ()

Abstract

Germany’s labor market responded only mildly to the Great Recession. Important factors for this development include the strong economic position due to recent labor market reforms, the crisis affecting mainly export-oriented companies, the extension of short-time work, time buffers due to working time accounts, the behavior of social partners, and automatic stabilizers. We emphasize the important interaction between short-time work and long-term shortages of skilled workers in sectors particularly affected by the crisis. Although Germany’s experience is in stark contrast to the United States, we identify and discuss common challenges at the center of the future jobs debate. Copyright Rinne and Zimmermann; licensee Springer. 2012

Suggested Citation

  • Ulf Rinne & Klaus Zimmermann, 2012. "Another economic miracle? The German labor market and the Great Recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.
  • Handle: RePEc:spr:izalpo:v:1:y:2012:i:1:p:1-21:10.1186/2193-9004-1-3
    DOI: 10.1186/2193-9004-1-3
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    References listed on IDEAS

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    1. Olga Bohachova & Bernhard Boockmann & Claudia M. Buch, 2011. "Labor Demand During the Crisis: What Happened in Germany?," CESifo Working Paper Series 3625, CESifo Group Munich.
    2. 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.
    3. Alan B. Krueger & Jorn-Steffen Pischke, 1997. "Observations and Conjectures on the U.S. Employment Miracle," NBER Working Papers 6146, National Bureau of Economic Research, Inc.
    4. Karl BRENKE & Ulf RINNE & Klaus F. ZIMMERMANN, 2013. "Short-time work: The German answer to the Great Recession," International Labour Review, International Labour Organization, vol. 152(2), pages 287-305, June.
    5. 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;International Institute of Public Finance, vol. 19(1), pages 118-138, February.
    6. Werner Eichhorst & Klaus F. Zimmermann, 2007. "And Then There Were Four...How Many (and Which) Measures of Active Labor Market Policy Do We Still Need?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 53(3), pages 243-272.
    7. 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).
    8. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers 8214, C.E.P.R. Discussion Papers.
    9. Christophe Hachon, 2010. "Do Beveridgian pension systems increase growth?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 825-831, March.
    10. 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).
    11. Giersch,Herbert & Paqué,Karl-Heinz & Schmieding,Holger, 1994. "The Fading Miracle," Cambridge Books, Cambridge University Press, number 9780521358699.
    12. 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).
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    More about this item

    Keywords

    Economic crisis; Germany; Short-time work; Unemployment; Labor market institutions; Internal flexibility; J68; J21; P52; O57;

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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