The Evolution of the German Labor Market

• In Event: 413 - Section on Organizations, Occupations and Work Refereed Roundtable Session. Table 01. Culture and Organizations
  In Refereed Roundtable 100min: Table 11. Law and Policy

Abstract

Germany has long been considered the classic coordinated market economy. However, the German labor market has undergone substantial changes in recent decades and scholars have debated whether there has been a rise of dualization and/or precariousness. We analyze how the German labor market changed from 1984 to 2010. Using data from the German Socio-Economic Panel (SOEP) through the Luxembourg Income Study, we examine five labor market outcomes: employment, temporary and part-time employment, wages, and low wage employment. The results show that the only unequivocally improving trend is the rise of employment among working-aged adults. By contrast, several labor market outcomes have grown worse. Part-time employment, low wage employment, and wage/earnings inequality have all increased substantially, and youth employment has declined. While there has been an increase in women’s labor force participation and employment, women are increasingly disadvantaged in terms of part-time employment, low wage employment, and hourly wages. Finally, there have been substantial increases in the education/skills of the labor force, and those with vocational training or high levels of education have becoming increasingly advantaged. Ultimately, we argue that dualization best captures the changes in the German labor market, though it is important to acknowledge the elements of stability and robustness within the German model.

Authors

• David Brady, University of California, Riverside

• Thomas Biegert, WZB Berlin Social Science Center