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Since the early 2000s, the German labour market has undergone a sweeping institutional transformation. While during the 1990s and early 2000s, Germany was usually regarded as the ‘sick man of Europe’, the country's economy has recently been described in many respects as an international role model. Around a decade ago, a reform package was introduced that resulted in the unemployment rate being almost cut in half, in spite of the difficult economic climate due to the financial crisis and the succeeding and still ongoing problems in the Eurozone. However, the success has also been challenged due to its alleged internal and external unpleasant side-effects by critics. After having explained the essence of the German social market economy and its development prior to the deep downswing of 2008/2009 which was coined the ‘Great Recession’ by leading US economists, the paper summarises the key aspects of the rather unexpected German labour market successes since 2009 and addresses claims of related distributional injustice of these reforms within the country as well as assertions that the German success of ongoing high exports and current account surpluses is based on beggar-thy-neighbour policies. Finally, the paper briefly asks whether Germany has faced up to its responsibilities during the crisis in the Eurozone since the end of 2009. [ABSTRACT FROM PUBLISHER]

In general, the 'mega-trends' represented by, for example, globalisation, the shift to a service economy coupled with high levels of technological change and a long-term shrinkage in the working population all make a more adaptable and skilled workforce in high income countries necessary. The pervasive effects of these mega-trends are often interpreted as suggesting that there is only one optimal institutional configuration to achieve good employment outcomes, which therefore needs to be adopted by all countries. As Britain seems closer to this ideal type than Germany, one would expect a better labour market performance in the former than in the latter, as well as a convergence in labour market policies and outcomes in Germany towards the British model. Taking into account the different starting positions of Germany and Britain, particularly with regard to important differences in monetary policy contexts, the paper evaluates whether and to what extent national public policy patterns are actually converging towards a higher level of flexibility. [ABSTRACT FROM AUTHOR]

Presents an international comparison of different approaches to reducing unemployment and increasing job creation with the objective of isolating a policy prescription for Germany. Remedy for high levels of structural unemployment; Effect on economic growth brought about by the introduction of a systematic employment-enhancing reform; Elements of a successful employment policy; Characteristics of alternative labor market strategies.

Summarizes the institutional arrangements and prerequisites for a different social partnership, necessary for the successful completion of labor market reform in western Germany. Importance of the labor market and its institutions in the German social market economy before turning to the case for reform; Employment and social policies that constitute a package of complementary instruments to fight high unemployment; Implications of the reform of the German labor market.