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From the Dual Apprenticeship System to a Dual Labor Market? The German High-Skill Equilibrium and the Service Economy

  • Eichhorst, Werner



  • Marx, Paul


    (University of Southern Denmark)

Different models of protection against labor market risks are associated with diverging models of economic performance. Historically established institutional complementarities between labor market regulation, unemployment protection, and vocational training tend to mirror specific national models of economic production. For example, the German dual apprenticeship system is a core feature of the corporatist model of "diversified quality production". This, in turn, is supported via skills-protecting, earnings-related unemployment insurance, skills-oriented active labor market policies and strong dismissal protection so that long-term productive employment relationships become viable. The paper explores the connection between structural change and the development of skill creation in the German case with a particular focus on the difference between manufacturing and services as well as between different types of service sub-sectors. The paper takes manufacturing, a sector dominated by standard employment, as a reference point but mainly addresses different segments of the service economy: traditional ones (banking and insurance), new high-skill sectors (IT and the "creative economy") and growing areas of low-skill services (hotels and restaurants, cleaning). We find that dynamic job creation in these segments of the service sector was possible due to a less regulated institutional environment.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4220.

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Length: 29 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4220
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  1. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, July.
  2. Andrea Bassanini & Ekkehard Ernst, 2002. "Labour market regulation, industrial relations and technological regimes: a tale of comparative advantage," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 391-426, June.
  3. Tito Boeri & J.Ignacio Conde-Ruiz & Vincenzo Galasso, 2003. "Protecting Against Labour Market Risk: Employment Protection or Unemployment Benefits?," Working Papers 239, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. 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).
  5. Marco Mundelius, 2009. "Einkommen in der Berliner Kreativbranche: angestellte Künstler verdienen am besten," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 76(9), pages 138-143.
  6. John T. Addison & Claus Schnabel & Joachim Wagner, 2006. "The (Parlous) State of German Unions," Working Paper Series in Economics 23, University of Lüneburg, Institute of Economics.
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