Unemployment in Germany: Reasons and Remedies

63 Pages Posted: 8 Mar 2003

See all articles by Norbert Berthold

Norbert Berthold

University of Würzburg - Institute of Economics and Social Sciences

Rainer Fehn

CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 2003

Abstract

This paper discusses the reasons for the dismal labor market performance of Germany over the last three decades along with potential remedies. It argues that labor market rigidities along with a generous welfare state in conjunction with certain changes in the economic environment are important in explaining this development but cannot solely account for it. Barriers to entrepreneurship, to setting up new firms and to innovations which are prevalent on goods and capital markets also play an important role in explaining the lackluster German economic performance of which rising unemployment is only one part. Comprehensive institutional reforms are therefore called for.

Keywords: Unemployment, Germany, Labor Market Reforms, Venture Capital, Innovations

JEL Classification: E24, E44, J00

Suggested Citation

Berthold, Norbert and Fehn, Rainer, Unemployment in Germany: Reasons and Remedies (February 2003). Available at SSRN: https://ssrn.com/abstract=385126

Norbert Berthold

University of Würzburg - Institute of Economics and Social Sciences ( email )

Sanderring 2
D-97070 Wuerzburg
Germany

Rainer Fehn (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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