Labour market perspectives for eastern Germany
Author: Kurt Vogler-Ludwig
Publisher: Ifo-Schnelldienst, Heft 16-17, Ifo-Institut für Wirtschaftsforschung
The persistent unemployment in Germany can not be attributed solely to the East German employment crisis, but above all to the wage policy focused on wage increases. This has made the German economy a high-wage country and, in turn, steadily increased unemployment, especially among the low-skilled. The productivity-oriented wage policy has failed. The solution may be to allow for a wider spread of wages and income and to limit social protection to those who really need it.