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The Gradual Transformation of Continental European Labor Markets: France and Germany Compared

  • Eichhorst, Werner

    ()

    (IZA)

Germany and France are both Continental European welfare states with severe labor market problems such as low employment and high and persistent unemployment which can be explained by labor market institutions that inhibit labor market adaptability. This paper analyzes recent reforms in core areas such as active and passive labor market policies, employment protection and the funding of social policies through taxes and social security contributions in both countries. It shows if and to what extent more favourable conditions for employment growth could be created. The paper identifies the limits of partial reforms in terms of the creation of more efficient labor market institutions although these reforms are highly plausible in politico-economic terms. However, the cumulative effect of sequences of marginal changes leads to a gradual medium-term transformation of both Continental European labor markets.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2675.

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Length: 35 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2675
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  1. Streeck, Wolfgang & Trampusch, Christine, 2005. "Economic reform and the political economy of the German welfare state," MPIfG Working Paper 05/2, Max Planck Institute for the Study of Societies.
  2. repec:iab:iabzaf:v:38:i:2/3:p:284-304 is not listed on IDEAS
  3. Eichhorst, Werner & Konle-Seidl, Regina, 2005. "The interaction of labor market regulation and labor market policies in welfare state reform," IAB Discussion Paper 200519, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR;CES;MSH, vol. 21(45), pages 5-59, 01.
  5. Juan José Dolado & Carlos García-Serrano & Juan F. Jimeno, . "Drawing Lessons from the Boom of Temporary Jobs in Spain," Working Papers 2001-11, FEDEA.
  6. Assar Lindbeck & Dennis J. Snower, 1989. "The Insider-Outsider Theory of Employment and Unemployment," MIT Press Books, The MIT Press, edition 1, volume 1, number 026262074x, June.
  7. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
  8. Streeck, Wolfgang, 2003. "From state weakness as strength to state weakness as weakness: Welfare corporatism and the private use of the public interest," MPIfG Working Paper 03/2, Max Planck Institute for the Study of Societies.
  9. Pierre Cahuc, 2002. "A quoi sert la prime pour l'emploi ?," Revue Française d'Économie, Programme National Persée, vol. 16(3), pages 3-61.
  10. Jacobi, Lena & Kluve, Jochen, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," IZA Discussion Papers 2100, Institute for the Study of Labor (IZA).
  11. Karl Brenke, 2006. "Wachsender Niedriglohnsektor in Deutschland: sind Mindestlöhne sinnvoll?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 73(15/16), pages 197-206.
  12. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of Policy Complementarities," CEPR Discussion Papers 1963, C.E.P.R. Discussion Papers.
  13. Cahuc, Pierre & Postel-Vinay, Fabien, 2001. "Temporary Jobs, Employment Protection and Labor Market Performance," IZA Discussion Papers 260, Institute for the Study of Labor (IZA).
  14. Corinne Prost & Pauline Givord & Sophie Audric, 2000. "Estimation de l'impact sur l'emploi non qualifié des mesures de baisse de charges," Revue économique, Presses de Sciences-Po, vol. 0(3), pages 513-522.
  15. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, March.
  16. Orszag, Mike & Snower, Dennis J., 1998. "Anatomy of policy complementarities," Open Access Publications from Kiel Institute for the World Economy 2252, Kiel Institute for the World Economy (IfW).
  17. Bernard Salanié & Guy Laroque, 2000. "Une décomposition du non-emploi en France," Économie et Statistique, Programme National Persée, vol. 331(1), pages 47-66.
  18. 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.
  19. repec:ilo:esbook:ebook7 is not listed on IDEAS
  20. Elena Stancanelli, 2004. "Evaluating the impact of the French tax credit programme: a difference in difference model," Documents de Travail de l'OFCE 2004-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  21. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  22. Eichhorst, Werner & Kaiser, Lutz C., 2006. "The German Labor Market: Still Adjusting Badly?," IZA Discussion Papers 2215, Institute for the Study of Labor (IZA).
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