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Der Euro als Jobmaschine? Zu den Auswirkungen des Euro auf den deutschen Arbeitsmarkt


  • Franz, Wolfgang

    () (ZEW Mannheim)


This paper analyzes the potential advantages and disadvantages of the introduction of the common European currency for the German labor market. First, experiences of the German currency union of 1990 cannot be transferred to the European case. Second, the loss of the instrument of nominal exchange rates per se should not be exaggerated, since, empirically, volatility among the European currencies is relatively low already and is mostly due to speculative capital flows which destroyed jobs in the past. Decreased transaction costs might have a positive effect on employment. On the other hand, the Euro will not create additional pressure on national market structres to adapt to increased competition. This is done by the persistent relevance of real exchange rates and the European Single Market. While higher mobility of labor might not be a desirable substitute for the buffer function of national monetary policy, there will be an increased need for wage flexibility in order to avoid negative impacts of asymmetric shocks. Increased intra-European transfers are no alternative due to their negative incentives for economic reform. Excessive wages, however, were not alimentated by the German Bundesbank either, and wage setting cannot be solely held responsible for high unemployment in situations of recession and mismatch in the labor market. Assessing these aspects of EMU, one should not expect massive positive employment effects of the Euro.

Suggested Citation

  • Franz, Wolfgang, 1998. "Der Euro als Jobmaschine? Zu den Auswirkungen des Euro auf den deutschen Arbeitsmarkt," IZA Discussion Papers 9, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9

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    References listed on IDEAS

    1. 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.
    2. 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.
    3. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
    4. 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.
    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 – German National Library of Economics / 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. Puhani, Patrick A., 1999. "Labour Mobility - An Adjustment Mechanism in Euroland?," IZA Discussion Papers 34, Institute for the Study of Labor (IZA).
    2. Patrick A. Puhani, 2001. "Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy," German Economic Review, Verein für Socialpolitik, vol. 2(2), pages 127-140, May.

    More about this item


    euroean monetary integration; labor market adjustment; unemployment;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General


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