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The German Labor Market: Still Adjusting Badly?

Author

Listed:
  • Eichhorst, Werner

    () (IZA)

  • Kaiser, Lutz C.

    () (North Rhine-Westphalia University of Applied Sciences)

Abstract

In the late nineties, Germany was often seen as a laggard with respect to labor market and welfare state reforms with institutional inertia being reflected in notoriously sluggish employment growth and rising unemployment. Recent years, however, saw a complex sequence of reforms with regard to labor market-related institutions such as labor market regulation, social benefits, active and activating labor market policies and attempts to reduce the burden of payroll taxes and – last but not least – a series of changes in collective bargaining. The paper shows if and to what extent labor-market related reforms in Germany have in fact contributed to overcoming structural weaknesses of a Continental European ‘welfare state without work’ and creating an institutional setup more conducive to strong employment growth and lower unemployment. We provide a detailed institutional analysis of the most relevant reforms in both public policies and collective bargaining and evaluate their effects on labor market structures and dynamics that can be identified so far. In particular we focus on the development of different types of employment and raise the question whether these upcoming non-standard forms of employment may be sustainable with respect to the future of the German labor market.

Suggested Citation

  • Eichhorst, Werner & Kaiser, Lutz C., 2006. "The German Labor Market: Still Adjusting Badly?," IZA Discussion Papers 2215, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2215
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    References listed on IDEAS

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    1. Gernandt Johannes & Pfeiffer Friedhelm, 2007. "Rising Wage Inequality in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(4), pages 358-380, August.
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    Cited by:

    1. Reinhold, Mario & Thomsen, Stephan, 2015. "Patterns of Labour Market Entry of High-Skilled Workers in Germany," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113018, Verein für Socialpolitik / German Economic Association.
    2. D'Amuri, Francesco & Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2010. "The labor market impact of immigration in Western Germany in the 1990s," European Economic Review, Elsevier, vol. 54(4), pages 550-570, May.
    3. 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).
    4. 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).
    5. repec:aia:aiaswp:wp52 is not listed on IDEAS

    More about this item

    Keywords

    labor market reforms; labor market policy; Germany;

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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