On the development of employment companies in eastern Germany

Abstract

"Over 400 employment companies are presently operating in eastern Germany. They were founded to influence socially acceptable employment reductions brought about by transformation process and to provide support for the creation of new jobs. After a blanket agreement between the Treuhandanstalt (THA), employers' associations, unions and the eastern German states in July of 1991, they in many cases received the programatic name 'company for employment promotion, employment and structural development (ABS)'. They were widely networked with each other via supporting bodies, which had primarily been given service and counseling tasks, and supplemented by so-called municipal employment companies. At the beginning of 1995 approximately 150,000 employees were employed, primarily with funds from the AFG (Employment Promotion Act). This was an increase of around 25% in comparison to the previous year. A slight decrease in employment during the first half of 1995 could be an indication of a trend change. Regular quarterly surveys of the supporting bodies by the Institute for Employment Research (IAB) show that full-time qualification measures hardly play a role anymore in the companies. The expansion of employment is primarily the result of an increase in job creation measures (which often contain qualification measures of up to 20% of work time). In conjunction with the measures pursuant to § 249h AFG, over 90% of all employment contracts in the companies can be attributed to these two categories of support. Almost half of all the participants affected by these measures are employed in employment companies in eastern Germany. However, huge differences exist between the individual states. Based on the surveys of the supporting bodies, further information on the quantitative employment development in the ABS companies is described. On the basis of results from more recent case studies this information was expanded by the description of current problems. Accordingly, it can be expected that finance problems in particular will be augmented in 1996. Employment companies have contributed decisively to absorbing the shock of job layoffs. Assessments differ in regard to the effectiveness of structural policy. They are considered to be encouraging signs of hope and in many regions as an indispensable element of the infrastructure of labour market policy. The development, function and functional transformation as well as the problems linked with the employment companies should continue to be researched." (Author's abstract, IAB-Doku) ((en))

Cite article

Brinkmann, C., Hiller, K. & Völkel, B. (1995): Zur Entwicklung von Beschäftigungsgesellschaften in Ostdeutschland. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 28, No. 4, p. 479-491.