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

Conny Wunsch

University of St. Gallen Department of Economics working paper series 2005 from Department of Economics, University of St. Gallen

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.

JEL-codes: J68 (search for similar items in EconPapers)
Pages: 99 pages
Date: 2005-03
New Economics Papers: this item is included in nep-eec, nep-his and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

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