The labour market in the Federal Republic of Germany in 2001 and 2002, with the prospects for 2003

Abstract

The economic dynamics deteriorated considerably throughout the world in 2001. The German economy, too, was seized by this. The dampening effects of the world economy were intensified by the consequences of the animal epidemics and a rather restrictive monetary policy. In addition economic growth was curbed by the persistent crisis in the construction industry. As a consequence of the cyclical weakness the strong growth of employment in Germany came to a standstill. On the whole in the annual average for 2001 the employment figure stood slightly (+0.2% or +70,000) above that of the previous year. This only applies to western Germany (+0.5% or +180,000), however, since in eastern Germany the employment figures fell once again (-1.7% or -110,000). In 2001 the labour force potential exceeded the level of the previous year by 120,000 persons (western Germany +180,000, eastern Germany -60,000) since the decreases associated with demography were more than offset above all by the labour force participation of women, which continued to increase strongly. As a result of the weakness in economic growth and employment dynamics, the development of unemployment fell short of expectations. In the course of 2002 the German economy is likely to recover gradually, but nevertheless at present no really good prospects are emerging for the further development. If the basic conditions in the world economy and in Germany's economy gradually improve, an economic growth of approx. 21/2% can be expected in 2003. The number of employed would then increase in the annual average by 210,000 persons or 0.5% and the unemployment figure would fall by about 100,000 to just under 3.9 million persons. (IAB2)

Cite article

Bach, H., Koch, S., Magvas, E., Pusse, L. & Spitznagel, E. (2002): Der Arbeitsmarkt in den Jahren 2001 und 2002 mit Ausblick auf 2003. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 35, No. 1, p. 7-36.