IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6625.html
   My bibliography  Save this paper

The Unexpected Appearance of a New German Model

Author

Listed:
  • Eichhorst, Werner

    () (IZA)

Abstract

Most Continental European labour markets and welfare states underwent a substantial transformation over the last two decades moving from a situation of low employment and limited labour market inequality to higher employment, but also more inequality. Germany is a case in point as it exhibits growing employment figures and growing shares of low pay and non-standard work. Furthermore, the German labour market has been remarkably resilient during the recent crisis. How can this be explained? The paper claims that changes in labour market institutions such as unemployment benefits, active labour market policies and employment protection play a major role, but changes in industrial relations at the sectoral level and individual firms' staffing practices are equally important in explaining actual labour market outcomes. Regarding labour market institutions, the pattern found in Germany shows sequences of de- and re-regulatory reforms of employment protection and increasing or decreasing unemployment benefit generosity, both mostly addressing the margins of the labour market, i.e. 'outsiders', and contributing to a growing dualisation of the employment system. The institutional status of 'insiders' was hardly affected by legislative changes. This dualisation trend was reinforced by micro-level dynamics in industrial relations and company employment practices where we can observe growing reliance on mechanisms of internal flexibility for the skilled core work force and increasing use of non-standard types of employment in less specifically skilled occupations.

Suggested Citation

  • Eichhorst, Werner, 2012. "The Unexpected Appearance of a New German Model," IZA Discussion Papers 6625, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6625
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp6625.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Virginia Doellgast & Ursula Holtgrewe & Stephen Deery, 2009. "The Effects of National Institutions and Collective Bargaining Arrangements on Job Quality in Front-Line Service Workplaces," ILR Review, Cornell University, ILR School, vol. 62(4), pages 489-509, July.
    2. Hemerijck, Anton & Eichhorst, Werner, 2009. "Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms," IZA Discussion Papers 4085, Institute for the Study of Labor (IZA).
    3. Werner Eichhorst & Michael Feil & Paul Marx, 2010. "Crisis, What Crisis? Patterns of Adaptation in European Labor Markets," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 61(Supplemen), pages 29-64.
    4. Hassel, Anke, 2011. "The paradox of liberalization – understanding dualism and the recovery of the German political economy," LSE Research Online Documents on Economics 53212, London School of Economics and Political Science, LSE Library.
    5. Spermann, Alexander, 2011. "The New Role of Temporary Agency Work in Germany," IZA Discussion Papers 6180, Institute for the Study of Labor (IZA).
    6. Markus M. Grabka & Joachim R. Frick, 2008. "Schrumpfende Mittelschicht: Anzeichen einer dauerhaften Polarisierung der verfügbaren Einkommen?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(10), pages 101-108.
    7. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 2, London School of Economics / European Institute.
    8. Ursula Holtgrewe & Virginia Doellgast, 2012. "A service union’s innovation dilemma: limitations on creative action in German industrial relations," Work, Employment & Society, British Sociological Association, vol. 26(2), pages 314-330, April.
    9. 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).
    10. Eichhorst, Werner & Marx, Paul, 2010. "Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States," IZA Discussion Papers 5035, Institute for the Study of Labor (IZA).
    11. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
    12. Grömling, Michael & Matthes, Jürgen, 2010. "Wächst die deutsche Industrie nur durch den Export?," Discussion Paper Series 110, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    13. 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).
    14. Rehder, Britta, 2003. "Betriebliche Bündnisse für Arbeit in Deutschland: Mitbestimmung und Flächentarif im Wandel," Schriften aus dem Max-Planck-Institut für Gesellschaftsforschung Köln, Max Planck Institute for the Study of Societies, volume 48, number 48.
    15. Eichhorst, Werner & Marx, Paul & Tobsch, Verena, 2009. "Institutional Arrangements, Employment Performance and the Quality of Work," IZA Discussion Papers 4595, Institute for the Study of Labor (IZA).
    16. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," LEQS – LSE 'Europe in Question' Discussion Paper Series 42, European Institute, LSE.
    17. 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.
    18. Karen A. Shire & Hannelore Mottweiler & Annika Schönauer & Mireia Valverde, 2009. "Temporary Work in Coordinated Market Economies: Evidence from Front-Line Service Workplaces," ILR Review, Cornell University, ILR School, vol. 62(4), pages 602-617, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chiara Benassi, 2016. "Liberalization Only at the Margins? Analysing the Growth of Temporary Work in German Core Manufacturing Sectors," British Journal of Industrial Relations, London School of Economics, vol. 54(3), pages 597-622, September.
    2. Rinawi, Miriam & Backes-Gellner, Uschi, 2015. "Occupational Skills and the Evolution of Wages," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112801, Verein für Socialpolitik / German Economic Association.
    3. Dingeldey, Irene & Kathmann, Till, 2017. "Einführung und Wirkmächtigkeit des gesetzlichen Mindestlohns in Deutschland: Institutionelle Reformen und gewerkschaftliche Strategien in einem segmentierten Tarifsystem," Schriftenreihe Institut Arbeit und Wirtschaft 21/2017, Institut Arbeit und Wirtschaft (IAW), Universität Bremen und Arbeitnehmerkammer Bremen.
    4. Valeria Pulignano & Andrea Signoretti, 2016. "Union Strategies, National Institutions and the Use of Temporary Labour in Italian and US Plants," British Journal of Industrial Relations, London School of Economics, vol. 54(3), pages 574-596, September.
    5. Daniel Feser & Till Proeger, 2017. "Asymmetric information as a barrier to knowledge spillovers in expert markets," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 211-232, March.
    6. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 967-1015.
    7. Economides, George & Moutos, Thomas, 2017. "Minimum wages in the presence of in-kind redistribution," CEPIE Working Papers 08/17, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    8. repec:bla:indrel:v:47:y:2016:i:5-6:p:530-546 is not listed on IDEAS
    9. David Marsden, 2015. "The Future of the German Industrial Relations Model," CEP Discussion Papers dp1344, Centre for Economic Performance, LSE.
    10. Colin Crouch, 2015. "Labour Market Governance and the Creation of Outsiders," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 27-48, March.
    11. Giuseppe Bertola & John Driffill & Harold James & Hans-Werner Sinn & Jan-Egbert Sturm & Ákos Valentinyi, 2013. "Chapter 3: Labour Market Reform and Youth Unemployment," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 73-94, February.
    12. Wanger, Susanne, 2017. "What makes employees satisfied with their working time? : The role of working hours, time-sovereignty and working conditions for working time and job satisfaction," IAB Discussion Paper 201720, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. World Bank Group, 2014. "Balancing Flexibility and Worker Protection," World Bank Other Operational Studies 23024, The World Bank.

    More about this item

    Keywords

    Germany; flexibility; labor market reforms; employment growth; dualisation;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6625. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.