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Is Germany the North Star of Labor Market Policy?

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  • Rinne, Ulf

    (IZA)

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

Germany's recovery from an unemployment disease and its resilience to the Great Recession is remarkable. Its success story makes it a showcase for labor policy and labor market reforms. This paper assesses the potential of the German experience as a model for effective, evidence-based policymaking. Flexible management of working time (through overtime and short-time work, time accounts and labor hoarding), social cohesion and controlled unit labor costs, combined with a rigid, incentive-oriented labor policy supported by effective program evaluation, define the characteristics of a strong reference model. Austerity, sometimes seen as core to the German model, is not viewed as a key element.

Suggested Citation

  • Rinne, Ulf & Zimmermann, Klaus F., 2013. "Is Germany the North Star of Labor Market Policy?," IZA Discussion Papers 7260, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7260
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    More about this item

    Keywords

    unemployment; Great Recession; austerity; Germany; labor policy; labor market reforms;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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