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The Post-Unification German Labor Market

  • Bonin, Holger

    ()

    (ZEW Mannheim)

  • Zimmermann, Klaus F.

    ()

    (IZA and University of Bonn)

This study surveys the development of the East German labor market after the unification of Germany. We explain that in the last decade, East Germans were faced with very high levels of joblessness that considering labor market exits and active labor market policy, are only partly reported as unemployment. A review of the evidence on the effectiveness of labor market policies suggests that job creation and training programs did not substantially promote reemployment, though they may have alleviated social burdens from unemployment. Discussing what causes the high unemployment in the east, we claim that effects of wage policy have been overrated. Differences in unemployment rates are also the result of more ample labor supply. We show that employment levels in the east have almost converged on western standards. The structure of employment, however, differs. Shortage of part-time work, service jobs and independent employment indicates that East Germany has failed to develop a service economy. We argue that unqualified adaptation to western procedures aggravated the investment and employment problem in the east.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 185.

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Length: 37 pages
Date of creation: Aug 2000
Date of revision:
Publication status: published in: R. T. Riphahn/ D. J. Snower / K. F. Zimmermann (Eds.), Employment Policy in Transition : The Lessons of German Integration for the Labor Market, Springer Verlag, 2001, 8-30; see IZA Reprints 66/00
Handle: RePEc:iza:izadps:dp185
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  1. Haisken-DeNew, John P. & Schmidt, Christoph M., 1999. "Industry Wage Differentials Revisited: A Longitudinal Comparison of Germany and USA (1984-1996)," IZA Discussion Papers 98, Institute for the Study of Labor (IZA).
  2. repec:iza:izadps:102 is not listed on IDEAS
  3. van der Klaauw, B. & van Ours, J.C., 1999. "Labor Supply and Matching Rates for Welfare Recipients : An Analysis Using Neighborhood Characterisitics," Discussion Paper 1999-105, Tilburg University, Center for Economic Research.
  4. van der Klaauw, Bas & van Ours, Jan C, 2000. "Labour Supply and Matching Rates for Welfare Recipients: An Analysis Using Neighbourhood Characteristics," CEPR Discussion Papers 2362, C.E.P.R. Discussion Papers.
  5. van Ours, J.C. & Ridder, G., 1999. "Fast track or Failure : A Study of the Completion Rates of Graduate Students in Economics," Discussion Paper 1999-118, Tilburg University, Center for Economic Research.
  6. Cahuc, Pierre & Zylberberg, André, 1999. "Job protection, minimum wage and employment," CEPREMAP Working Papers (Couverture Orange) 9914, CEPREMAP.
  7. Wright, Robert E., 1999. "The Rate of Return to Private Schooling," IZA Discussion Papers 92, Institute for the Study of Labor (IZA).
  8. Cahuc, Pierre & Zylberberg, André, 2000. "Redundancy payments, incomplete labor contracts, unemployment and welfare," CEPREMAP Working Papers (Couverture Orange) 0006, CEPREMAP.
  9. Husted, Leif & Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," IZA Discussion Papers 101, Institute for the Study of Labor (IZA).
  10. Giorgio Brunello & Clara Graziano & Bruno Parigi, 1999. "Ownership or Performance: What Determines Board of Directors' Turnover in Italy?," Working Papers 1999.30, Fondazione Eni Enrico Mattei.
  11. Breedon, F J & Fisher, P G, 1996. "M0: Causes and Consequences," The Manchester School of Economic & Social Studies, University of Manchester, vol. 64(4), pages 371-87, December.
  12. Barrett, Alan, 1999. "Irish Migration: Characteristics, Causes and Consequences," IZA Discussion Papers 97, Institute for the Study of Labor (IZA).
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