After decades of increasing prosperity, the economic performance in Germany was relatively poor between 1995 and 2005 with a yearly average growth rate of 1.5%, while unemployment rose to over 5 million people in 2005. The author addresses two questions How can the economic downturn be explained...

This paper analyses the determinants and impact of labour market reforms in the European Union over the period of 2000-2011. The source of information on reforms is the LABREF database developed in DG ECFIN of the European Commission in cooperation with the Economic Policy Committee of the...

A usual interpretation of the high performance of the German economy since 2005 is that the Hartz labour market reforms have boosted German competitiveness, resulting in higher exports, higher production and lower unemployment. This explanation is at odds with the sequence of observed facts. We...

Macroeconomic shocks and labour-market institutions jointly determine employment growth and economic performance. The effect of shocks depends on the nature of these intitutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of...

In this paper, I analyze the pros and cons of implementing structural reforms of the labor market in booms vs. recessions, in light of considerations of social efficiency, political viability, and macroeconomic fine tuning. While the optimal timing of a reform depends on the relative importance...

As a reaction on high and persistent unemployment in Germany, the largest labour market reforms in post-war history were implemented between 2003 and 2005. We analyse the impact of the reform and its coincidence with an economic expansion on the efficiency of matching out of unemployment....