IDEAS home Printed from https://ideas.repec.org/p/usg/dp2005/2005-06.html
   My bibliography  Save this paper

Labour Market Policy in Germany: Institutions, Instruments and Reforms since Unification

Author

Listed:
  • Conny Wunsch

    ()

Abstract

Almost 15 years after Unification in 1990, Germany is still struggling with the economic consequences of this event. Although the East German economy has made considerable progress since its near-collapse after the German monetary, economic and social union in July 1990, the East German labour market has not yet recovered. Western Germany, which had to bear a substantial part of the fiscal cost of German Unification, is also faced with high unemployment though the rate is considerably lower than in the Eastern part. Expenditure for activation measures and income support during unemployment is substantial and one of the highest among OECD countries. In response to exploding cost of unemployment and continuing public pressure to solve the unemployment problem, the German Federal Government has started the largest social policy reform in the history of the Federal Republic. This paper reconstructs the development of the German labour market and the stepwise reform of German labour market policy since German Unification in 1990. It provides a detailed description of the instruments of German active labour market policy and reviews the existing econometric evidence on their effectiveness.

Suggested Citation

  • Conny Wunsch, 2005. "Labour Market Policy in Germany: Institutions, Instruments and Reforms since Unification," University of St. Gallen Department of Economics working paper series 2005 2005-06, Department of Economics, University of St. Gallen.
  • Handle: RePEc:usg:dp2005:2005-06
    as

    Download full text from publisher

    File URL: http://ux-tauri.unisg.ch/RePEc/usg/dp2005/DP-06_Wu.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Markus Frölich & Michael Lechner & Heidi Steiger, 2003. "Statistically Assisted Programme Selection - International Experiences and Potential Benefits for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 311-331, September.
    2. Eckhard Wurzel, 2001. "The Economic Integration of Germany's New Länder," OECD Economics Department Working Papers 307, OECD Publishing.
    3. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
    4. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    5. Annette Bergemann & Bernd Fitzenberger & Stefan Speckesser, 2009. "Evaluating the dynamic employment effects of training programs in East Germany using conditional difference-in-differences," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 797-823.
    6. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2004. "Evaluation der Eingliederungseffekte von Arbeitsbeschaffungsmaßnahmen in reguläre Beschäftigung für Teilnehmer in Deutschland," ZEW Discussion Papers 04-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Wolfgang Franz & Viktor Steiner, 2000. "Wages in the East German Transition Process: Facts and Explanations," German Economic Review, Verein für Socialpolitik, vol. 1(3), pages 241-269, August.
    8. Hujer, Reinhard & Caliendo, Marco & Thomsen, Stephan L., 2004. "New evidence on the effects of job creation schemes in Germany--a matching approach with threefold heterogeneity," Research in Economics, Elsevier, vol. 58(4), pages 257-302, December.
    9. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    10. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April.
    11. Fitzenberger, Bernd & Prey, Hedwig, 2000. "Evaluating Public Sector Sponsored Training in East Germany," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 497-520, July.
    12. Siebert, Horst, 1991. "The integration of Germany : Real economic adjustment," European Economic Review, Elsevier, vol. 35(2-3), pages 591-602, April.
    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. Lechner, Michael & Wunsch, Conny, 2006. "Active Labour Market Policy in East Germany: Waiting for the Economy to Take Off," CEPR Discussion Papers 5924, C.E.P.R. Discussion Papers.
    2. Michael Lechner & Ruth Miquel & Conny Wunsch, 2007. "The Curse and Blessing of Training the Unemployed in a Changing Economy: The Case of East Germany After Unification," German Economic Review, Verein für Socialpolitik, vol. 8, pages 468-509, November.
    3. Michael Lechner & Conny Wunsch, 2009. "Active labour market policy in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 661-702, October.
    4. Stefanie Behncke & Markus Frölich & Michael Lechner, 2008. "A Caseworker Like Me - Does The Similarity Between Unemployed And Caseworker Increase Job Placements?," University of St. Gallen Department of Economics working paper series 2008 2008-08, Department of Economics, University of St. Gallen.
    5. Stefanie Behncke & Markus Frˆlich & Michael Lechner, 2010. "Unemployed and their caseworkers: should they be friends or foes?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(1), pages 67-92.
    6. Marco Caliendo & Jens Hogenacker, 2012. "The German labor market after the Great Recession: successful reforms and future challenges," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-24, December.
    7. Iryna Kyzyma, 2014. "Changes in the Patterns of Poverty Duration in Germany, 1992–2009," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S2), pages 305-331, November.
    8. Jun Nie, 2010. "Training or search? evidence and an equilibrium model," Research Working Paper RWP 10-03, Federal Reserve Bank of Kansas City.
    9. Kluve, Jochen & Schneider, Hilmar & Uhlendorff, Arne & Zhao, Zhong, 2012. "Evaluating continuous training programmes by using the generalized propensity score," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 587-617.
    10. Fitzenberger, Bernd & Volter, Robert, 2007. "Long-run effects of training programs for the unemployed in East Germany," Labour Economics, Elsevier, vol. 14(4), pages 730-755, August.
    11. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2016. "Job Creation Schemes in Turbulent Times," IZA Discussion Papers 10369, Institute for the Study of Labor (IZA).
    12. KYZYMA Iryna, 2013. "Changes in the patterns of poverty duration in Germany, 1992-2009," LISER Working Paper Series 2013-06, LISER.
    13. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
    14. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(2), pages 299-321, June.
    15. Michael Lechner & Blaise Melly, 2007. "Earnings Effects of Training Programs," University of St. Gallen Department of Economics working paper series 2007 2007-28, Department of Economics, University of St. Gallen.
    16. Juan Carlos Martinez Oliva, 2009. "Riunificazione intertedesca e politiche per la convergenza," Mo.Fi.R. Working Papers 14, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    17. Jochen Kluve & Lena Jacobi, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," RWI Discussion Papers 0041, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    18. Jacobi, Lena & Kluve, Jochen, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," IZA Discussion Papers 2100, Institute for the Study of Labor (IZA).
    19. repec:iab:iabzaf:v:39:i:3/4:p:347-364 is not listed on IDEAS
    20. Yankova, Katerina, 2010. "Der Selektionsprozess in Maßnahmen der aktiven Arbeitsmarktpolitik : eine explorative Untersuchung für die deutsche Arbeitsvermittlung (The selection process in active labour market policy measures : ," IAB Discussion Paper 201011, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    21. repec:iab:iabzaf:v:39:i:3/4:p:365-390 is not listed on IDEAS
    22. repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
    23. Martin Huber & Michael Lechner & Conny Wunsch & Thomas Walter, 2011. "Do German Welfare‐to‐Work Programmes Reduce Welfare Dependency and Increase Employment?," German Economic Review, Verein für Socialpolitik, vol. 12(2), pages 182-204, May.
    24. repec:zbw:rwidps:0041 is not listed on IDEAS

    More about this item

    JEL classification:

    • 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:usg:dp2005:2005-06. 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: (Joerg Baumberger). General contact details of provider: http://edirc.repec.org/data/vwasgch.html .

    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.