SFB649DP2016 005
The German Labor Market Miracle, 2003 -2015: An Assessment
Michael C. Burda
Abstract:
This paper reviews the dramatic and widely noted developments in the
German labor market in the past decade and surveys the most plausible reasons for
these changes. Alternative hypotheses are compared and contrasted. I argue that the
labor market reforms associated with the Agenda 2010 – the Hartz reforms – played
a role at least as great as that of increasing flexibility of wage determination and the
allocation of hours across workers. Until 2010, the German economic miracle could
be accounted for by an expansion of part-time work, which has since been supplanted
by a sustained expansion of full-time employment. Supported by wage flexibility in
this segment, part-time employment represents an important new margin of flexibility
in the German labor market.
Keywords:
German labor market miracle, Hartz reforms, part-time work, wage inequality
JEL Classification:
E24, J21