Mehr Beschäftigung mittels weniger Kündigungsschutz? - Ökonomische Analyse der Vereinbarungen des Koalitionsvertrages vom 11.11.2005

Rules of employment protection installed by legislation or wage agreements should enhancethe failures of the labour market mechanism, for instance to stabilize the demand for labourforce over several time periods. Fluctuation of human capital is mostly connected with costsfor both parties of the labour market. The raising of one kind of fluctuation tax as done byemployment protection rules intends to minimise these negative externalities but has also theeffect of establishing barriers against the generation of additional employment by theenterprises. The coalition agreement of the german government from 11.11.2005 extends thewaiting period for employment protection intending a stimulation of incentives for moreemployment. The article analyzes the economic implications of this political driven approachand indicates the small probability of succeeding in comparison with the ambitious aims setby the german governmental policy.