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Match and mismatch on the German labor market

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  • Franz, Wolfgang

Abstract

It is often claimed that growing labor market imperfections and maladjustments can be blamed for the increase and persistence of unemployment in the Federal Republic of Germany. This paper attempts to marshall the empirical importance of these factors. Higher structural unemployment seems to be significantly evidenced by shifts of the Beveridge curve and by results obtained from a macroeconometric disequilibrium model. Possible causes of higher structural unemployment are then examined such as reduced labor mobility, higher regional and qualifications mismatch, increased employer choosiness, lower search intensity, more institutional regulations such as dismissal protection laws, higher unemployment compensation, and the like. It seems safe to say that the probable increased malfunctioning of the labor market does not stem from an accelerated pace of structural change. Moreover, one can guess that some higher imbalances in terms of qualifications and a greater employer choosiness are more promising candidates which have interfered with the smooth equalizing of labor demanded and supplied.

Suggested Citation

  • Franz, Wolfgang, 1990. "Match and mismatch on the German labor market," Discussion Papers, Series II 99, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:99
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    References listed on IDEAS

    as
    1. Franz, Wolfgang & Konig, Heinz, 1986. "The Nature and Causes of Unemployment in the Federal Republic of Germany since the 1970s: An Empirical Investigation," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages 219-244, Supplemen.
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    3. Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-793, August.
    4. Franz, Wolfgang & Konig, Heinz, 1990. "A disequilibrium approach to unemployment in the Federal Republic of Germany," European Economic Review, Elsevier, vol. 34(2-3), pages 413-422, May.
    5. Budd, Alan & Levine, Paul & Smith, Peter, 1987. "Long-term unemployment and the shifting U-V curve : A multi-country study," European Economic Review, Elsevier, vol. 31(1-2), pages 296-305.
    6. George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
    7. Budd, Alan & Levine, Paul & Smith, Peter, 1988. "Unemployment, Vacancies and the Long-term Unemployed," Economic Journal, Royal Economic Society, vol. 98(393), pages 1071-1091, December.
    8. Abraham, Katharine G, 1983. "Structural-Frictional vs. Deficient Demand Unemployment: Some New Evidence," American Economic Review, American Economic Association, vol. 73(4), pages 708-724, September.
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