Etiopathology of Europe's Sick Man: Worker Flows in Germany, 1959-2016

Benjamin Hartung (benjamin.hartung@uni-bonn.de), Philip Jung (philip.jung@tu-dortmund.de) and Moritz Kuhn
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Benjamin Hartung: University of Bonn

No 10341, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We provide new estimates on worker flow rates in and out of unemployment for Germany covering the last six decades. In the 1980s, Germany emerged as the sick man of Europe with a labor market characterized by persistently high unemployment rates. We attribute a substantial fraction of the rise in unemployment to a dramatic increase in inflow rates compared to the 1960s. Germany's recovery started in the mid-2000s after the Hartz reforms, when inflow rates persistently decreased. Comparing the German and U.S. labor market during recessions uncovers a striking similarity between the recent financial crisis in the U.S. and the German recession in the 1980s. We relate these findings to existing theories on labor market differences between the U.S. and Germany.

Keywords: labor market dynamics; worker flows; Germany (search for similar items in EconPapers)
JEL-codes: J63 J64 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2016-11
New Economics Papers: this item is included in nep-eur and nep-ias
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