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Economic reform and the political economy of the German welfare state

  • Streeck, Wolfgang
  • Trampusch, Christine
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    The key to economic reform in Germany is a significant reduction in the high costs of labour.The main factor driving up German labour costs is the funding of the extensive German welfare state through social insurance contributions that in effect operate like payroll taxes on employment. The paper discusses the political causes of the rise in non-wage labour costs since the 1970s. It then proceeds to show how a variety of opportunities for political blockade in the German political economy dim the prospect for effective reform in the foreseeable future.

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    File URL: http://econstor.eu/bitstream/10419/44285/1/550474854.pdf
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    Paper provided by Max Planck Institute for the Study of Societies in its series MPIfG Working Paper with number 05/2.

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    Date of creation: 2005
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    Handle: RePEc:zbw:mpifgw:052
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    1. Ebbinghaus, Bernhard, 2008. "Reforming Early Retirement in Europe, Japan and the USA," OUP Catalogue, Oxford University Press, number 9780199553396.
    2. Ebbinghaus, Bernhard & Hassel, Anke, 1999. "Striking deals: Concertation in the reform of continental European welfare states," MPIfG Discussion Paper 99/3, Max Planck Institute for the Study of Societies.
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