Is Germany the North Star of Labor Market Policy?

Ulf Rinne and Klaus Zimmermann ()

No 7260, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Germany's recovery from an unemployment disease and its resilience to the Great Recession is remarkable. Its success story makes it a showcase for labor policy and labor market reforms. This paper assesses the potential of the German experience as a model for effective, evidence-based policymaking. Flexible management of working time (through overtime and short-time work, time accounts and labor hoarding), social cohesion and controlled unit labor costs, combined with a rigid, incentive-oriented labor policy supported by effective program evaluation, define the characteristics of a strong reference model. Austerity, sometimes seen as core to the German model, is not viewed as a key element.

Keywords: unemployment; Great Recession; austerity; Germany; labor policy; labor market reforms (search for similar items in EconPapers)
JEL-codes: J21 J68 O57 P52 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-03
New Economics Papers: this item is included in nep-eec, nep-lab, nep-lma and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

Published - substantially revised version published in: IMF Economic Review , 2013, 61 (4), 702-729

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