Much Ado about Nothing? Recent Labour Market Reforms in Germany – a Preliminary Assessment

Gustav Horn; Camille Logeay; Katja Rietzler

doi:10.5771/0935-9915-2008-3-161

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- Kapitel Ausklappen | EinklappenAutorenSeiten
- 157–160 Titelei/Inhaltsverzeichnis 157–160
- 161–178 Much Ado about Nothing? Recent Labour Market Reforms in Germany – a Preliminary Assessment Gustav Horn, Camille Logeay, Katja Rietzler Gustav Horn, Camille Logeay, Katja Rietzler 161–178
- 179–199 Students as Non-Standard Employees. Exploring Work Related Issues in Students’ Perceptions on their Term-time Job Ingo Winkler Ingo Winkler 179–199
- 200–228 Strategic Outsourcing in the German Engine Building Industry. An Empirical Study Based on the Resource Dependence Approach Susanne Gretzinger Susanne Gretzinger 200–228
- 229–246 Research Note 229–246
- 247–249 Book Review 247–249
- 250–252 New Books 250–252
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mrev management revue , Seite 161 - 178

Much Ado about Nothing? Recent Labour Market Reforms in Germany – a Preliminary Assessment

Autoren

Gustav Horn Camille Logeay Katja Rietzler

DOI
- doi.org/10.5771/0935-9915-2008-3-161
- ISSN print: 0935-9915
- ISSN online: 1861-9908
Abstract

The article examines the macroeconomic effects of the recent labour market reforms in Germany. The reforms increased the downward pressure on wages and led to rising income inequality. Many German economists welcomed this effect, because they consider lower wages and higher wage dispersion major prerequisites for stronger employment growth. The theoretical analysis shows that a strategy of wage restraint might make sense in a small open economy, where exports play a dominating role. However, in a large and less open economy the negative effects of wage restraint on domestic demand are likely to outweigh the positive effects of enhanced competitiveness as could be observed in Germany in recent years. A comparison of the most recent two upswings confirms that the labour intensity of growth has not risen since the reforms. At the same time German wage restraint has contributed to increasing trade imbalances in the euro area.
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