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Das Entsendegesetz: Suendenfall oder Loesung des Arbeitslosigkeitsproblems?

Author

Listed:
  • Rotte, Ralph

    (RWTH Aachen University)

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

In March 1996, the Bundestag introduced a minimum wage law for the German construction business in order to protect native workers from low wage competition by posted workers from other EU countries. This Entsendegesetz (Posted Workers Act) was backed formally by the EU Posted Workers Directive of December 1996. This paper analyzes the economic and political background of the law as well as its impact on the German construction business according to economic theory and provisional empirical evidence from similar protective measures taken in the U.S. The effectiveness of the law is seriously limited by practical and conceptional problems, like resource constraints in control, shifts from legal to illegal employment, or compatibility with basic EU law and principles. Moreover, since the central problems of the German construction business are structural, one cannot expect much of a relief for the labor market of native workers. Since the Entsendegesetz seems therefore only justifiable in the short run in order to smoothen structural adjustment and to avoid political unrest and xenophobia, it should not be extended.

Suggested Citation

  • Rotte, Ralph & Zimmermann, Klaus F., 1998. "Das Entsendegesetz: Suendenfall oder Loesung des Arbeitslosigkeitsproblems?," IZA Discussion Papers 8, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8
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    References listed on IDEAS

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    1. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
    2. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
    3. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
    4. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    5. Machin, Stephen & Manning, Alan, 1996. "Employment and the Introduction of a Minimum Wage in Britain," Economic Journal, Royal Economic Society, vol. 106(436), pages 667-676, May.
    6. Noll, Bernd, 1996. "Zwischenruf oder Nachlese zum Arbeitnehmer-Entsendegesetz?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 76(8), pages 418-424.
    7. Volker Rußig, 1996. "Bauwirtschaft in Deutschland : beschleunigter Strukturwandel," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 49(25-26), pages 14-29, October.
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    Cited by:

    1. Volker Meier & Sonja Munz, 2008. "Beschäftigungseffekte von Mindestlöhnen unter Vernachlässigung der Hauptbetroffenen: Kommentar zu König und Möller," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(15), pages 30-32, August.
    2. Rotte, Ralph, 1998. "Sorties from the Fortress: The Current System of Anti-Immigration Policy in Germany," IZA Discussion Papers 13, Institute of Labor Economics (IZA).

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    Keywords

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    JEL classification:

    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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