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Unemployment in Interwar Germany: An Analysis of the Labor Market, 1927–1936

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  • DIMSDALE, NICHOLAS H.
  • HORSEWOOD, NICHOLAS
  • VAN RIEL, ARTHUR

Abstract

This article contributes to the debate on the causes of unemployment in interwar Germany. It applies the Layard-Nickell model of the labor market to interwar data. The results indicate that demand shocks, combined with nominal inertia in the labor market, were important in explaining unemployment. Real wage pressures due to procedures for wage determination were a major influence on unemployment, but were partly offset by movements in other supply-side variables, such as the replacement ratio and the pricing policy of cartels. Demand- and supply-side variables were mutually reinforcing in the Great Depression and in the recovery under the Nazis.

Suggested Citation

  • Dimsdale, Nicholas H. & Horsewood, Nicholas & Van Riel, Arthur, 2006. "Unemployment in Interwar Germany: An Analysis of the Labor Market, 1927–1936," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 778-808, September.
    • Handle: RePEc:cup:jechis:v:66:y:2006:i:03:p:778-808_00
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    Cited by:

    1. Michael Wyrwich, 2022. "Historical episodes and their legacies across space: A famous case revisited," Journal of Regional Science, Wiley Blackwell, vol. 62(4), pages 1048-1091, September.
    2. Eric Bengtsson & Engelbert Stockhammer, 2018. "Wages, income distribution and economic growth in Scandinavia," Working Papers PKWP1811, Post Keynesian Economics Society (PKES).
    3. Michael Wyrwich, 2017. "Woman and the labour market in East and West Germany: Socialist legacy and pre-socialist tradition," Jena Economics Research Papers 2017-015, Friedrich-Schiller-University Jena.
    4. Galofré-Vilà, Gregori & Meissner, Christopher M. & McKee, Martin & Stuckler, David, 2021. "Austerity and the Rise of the Nazi Party," The Journal of Economic History, Cambridge University Press, vol. 81(1), pages 81-113, March.
    5. Wyrwich, Michael, 2019. "Women and the labour market in East and West Germany: The role of socialist legacy and pre-socialist tradition," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203572, Verein für Socialpolitik / German Economic Association.

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