The Quest for a Double Transformation
The Quest for a Double Transformation
Trends of Flexibilization in the Labor Markets of East and West Germany
This chapter discusses the crucial area of labor-market regulation and labor-market dynamics to address the question of whether the two parts of Germany were developing into the same direction and with the same pace of change during the 1990s. It focuses on job-shift patterns, unemployment, and the implementation of internal as well as external flexibility measures. The results support the view of a simple export of outdated West German regulations to the East, leading in both East and West Germany to low dynamics and a sharp division between insiders and outsiders in the labor market. The pace of flexibilization is about the same in most respects in both parts of Germany, but due to the more severe initial situation in East Germany, the signs of a labor-market catastrophe are more visible there, as exemplified in the double amount of unemployment.
Keywords: labor-market regulation, labor-market dynamics, German markets, unemployment
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