In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations. Using a large confidential data set from the German social security administration, we find that the reforms were associated with a fall in the earnings of workers returning to work from short-term unemployment relative to workers in long-term employment of about 10 percent. We interpret this as evidence that the reforms strengthened incentives to return to work but, in doing so, they adversely affected post re-entry earnings.
In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations. Using a large confidential data set from the German social security administration, we find that the reforms were associated with a fall in the earnings of workers returning to work from short-term unemployment relative to workers in long-term employment of about 10 percent. We interpret this as evidence that the reforms strengthened incentives to return to work but, in doing so, they adversely affected post re-entry earnings.
This volume investigates the ways in which firms and workers are adjusting to globalization. A collection of cutting-edge essays investigating the ways in which firms and workers are adjusting to globalization. Written by leading researchers in the field. Covers such issues as: outsourcing; the productivity effects of entry to export markets; job losses and wage insurance; and the protection of intellectual property. Presents original research on adjusting to globalization. Provides important insights into the microeconomics effects of globalization. Highlights key issues for policy makers.
The German pension system was the first formal pension system in the world, designed by Bismarck nearly 120 years ago. It has been very successful in providing high and reliable pension levels at reasonable contribution rates. While the generosity of the German pension system is considered a great social achievement, negative incentive effects of past reforms in the 1970s and 1980s and population aging are threatening the very core of the system. This has led to fundamental pension reforms since 1992. Based on a detailed simulation model of the German pension system, this book provides a thorough assessment of the system and its reforms. It shows that the latest reforms have put the system back onto a stable path and moved it from the old monolithic towards a multi-pillar system.
Since the Financial Crisis in 2008 Germany has performed economically far better than most of its neighbouring countries. What makes Germany so special that nobel prize winner Krugman called it a German miracle and is this sustainable? Is it its strong economic and political institutions, in particular trade unions, which by international comparison are a solid rock in turbulent waters, its vocational training which guarantees high skilled labour and low youth unemployment, its social partnership agreements which showed large flexibility of working time arrangements during the crisis and turned the rock into a bamboo flexibly bending once the rough wind of globalization was blowing? Or was it simply luck, booming exports to China and the East, a shrinking population, or worse so, a demolition of the German welfare state? All along from miracle to fate to shame of the German model: Is there such a thing like a core of Germany? The debate on the German model is controversial within Germany. But what do neighbours think about Germany? The Nordic countries want to copy German labor market institutions. The Western countries admire it for its high flexibility within stable institutions, the Austrians have a similar model but question Germany's welfare arrangements and growth capacities. Many Eastern European countries are relatively silent about the German model. There is admiration for the German economic success, but at the same time not so much for its institutions and certainly not for its restrictive migration policy. The Southern countries see it as a preposterous pain to Europe by shaping EU policy a la Germany and forcing austerity policy at the costs of its neighbours. Can the German model be copied? And what do neighbours recommend Germany to do?
With the onset of the recession in 1990, job security has moved to the forefront of labor market concerns in the United States. During economic downturns, American employers rely heavily on layoffs to cut their work force, much more than do their counterparts in other industrialized nations. The hardships imposed by these layoffs have led many to ask whether U.S. workers can be offered more secure employment without burdening the companies that employ them. In this book, Katharine Abraham and Susan Houseman address this question by comparing labor adjustment practices in the United States, where existing policies arguably encourage layoffs, with those in Germany, a country with much stronger job protection for workers. From their assessment of the German experience, the authors recommend new public policies that promote alternatives to layoffs and help reduce unemployment. Beginning with an overview of the labor markets in Germany and the United States, Abraham and Houseman emphasize the interaction of various government policies. Stronger job security in Germany has been accompanied by an unemployment insurance system that facilitates short-time work as a substitute for layoffs. In the United States, however, the unemployment insurance system has encouraged layoffs and discouraged the use of work-sharing schemes. The authors examine the effects of job security on the efficiency and equity of labor market adjustment and review trends in U.S. policy. Finally, the authors recommend reforms of the U.S. unemployment insurance system that include stronger experience rating and an expansion of short-time compensation program. They also point to the critical link between job security and the system of worker training in Germany and advocate policies that would encourage more training by U.S. companies.
The Fading Miracle provides a lucid account of economic policy in West Germany from the late 1940s up to the present. First published in hardback in 1992, this paperback edition has been updated to include events since then. The authors describe and evaluate the major policy controversies and decisions, and place particular emphasis on the characteristically German institutions of policy counselling and their role in policy formation. The book will be of interest to students and teachers of economics, and to all those with an interest in the development of the greatest economic power in Europe.
Belman and Wolfson perform a meta-analysis on scores of published studies on the effects of the minimum wage to determine its impacts on employment, wages, poverty, and more.
Why were European economies able to pursue the simultaneous commitment to full employment and welfare state expansion during the first decades of the postwar period and why did this virtuous relationship break down during recent decades? This book provides an answer to this question, by highlighting the critical importance of a political exchange between unions and governments, premised on wage moderation in exchange for the expansion of social services and transfers. The strategies pursued by these actors in these political exchanges are influenced by existing wage bargaining institutions, the character of monetary policy and by the level and composition of social policy transfers. The book demonstrates that the gradual growth in the fiscal burden has undermined the effectiveness of this political exchange, lowering the ability of unions' wage policies to affect employment outcomes.
This 2015 Article IV Consultation highlights that the ongoing upturn in Germany is benefiting from the euro depreciation and lower energy prices, and is underpinned by a healthy fiscal position and sound corporate and household balance sheets. Employment growth has been robust, supported by strong immigration. The unemployment rate hit an additional post-reunification low at 4.7 percent. The oil price drop brought inflation temporarily close to zero, which has contributed to lift real wage growth to a 20-year high. The current moderate growth momentum is expected to continue as robust real wages buoy private consumption and euro depreciation buttresses exports, opening the way for a recovery in machinery and equipment investment.
