Labour market trends and active labour market policy in the Eastern German transformation process 1990-1997

Abstract

"A German unification in 1990, labour market policy makers were confronted with a drastic reduction in employment: more than three million jobs disappeared in eastern Gemany. Unemployment rapidly soared to over one million. A further escalation of mass unemployment was successfully held in check, but in the course of time the limits of labour market policy have started to show. It has become clear that labour market policy alone cannot solve employment problems in the eastern German Länder (including the eastern part of Berlin): it must be combined with other employment-related political decisions on instruments and institutions. A creative approach to novel models of co-operation of various political players (different fields of policy and different levels of decision-making) is nothing new in eastern Germany. However, tight budgets and less flexible administrative and political attitudes may well curtail such ventures. Labour promotion is now provided for by a new law which entered into force on 1 January, 1998 in Germany. It includes a still wider range of integration assistance options for persons who are difficult to place, as well as ways of establishing such cooperative approaches, and even expanding them. However, both hiring subsidies for certain target groups paid directly to regular business enterprises and new hiring incentives in the form of integration contracts merit further attention. The new law also substantially strengthened the decision - making competence of all 181 local labour offices. This means that the regions themselves can influence the success of active labour market policy measures to a much greater extent than before." (Author's abstract, IAB-Doku) ((en))

Cite article

Bach, H. (1998): Labour market trends and active labour market policy in the Eastern German transformation process 1990-1997. In: IAB Labour Market Research Topics No. 29, p. 1-35.