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The Labour Market in East Germany

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  • Bosch, Gerhard
  • Knuth, Matthias

Abstract

After currency union with West Germany, industrial production in East Germany fell by approximately one third, resulting in job losses of more than 40 percent. The article investigates the fate of workers made redundant, a large proportion of whom have been assimilated into various labor market policy measures. The scale of these measures, which exceeds any active labor market policy hitherto implemented in Germany, cannot be sustained. Since wages in East Germany are rapidly being adjusted upwards to West German levels, the cost of labor market policy programs is also rising very quickly. The authors conclude that labor market policy is not--as intended--acting as a bridge into new employment but has rather allowed the large combines to dismiss workers without facing any great resistance. Copyright 1993 by Oxford University Press.

Suggested Citation

  • Bosch, Gerhard & Knuth, Matthias, 1993. "The Labour Market in East Germany," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 17(3), pages 295-308, September.
    • Handle: RePEc:oup:cambje:v:17:y:1993:i:3:p:295-308
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    Cited by:

    1. Christine EVANS-KLOCK & Peggy KELLY & Peter RICHARDS & Corinne VARGHA, 1999. "Worker retrenchment: Preventive and remedial measures," International Labour Review, International Labour Organization, vol. 138(1), pages 47-66, March.
    2. Felix Büchel ; Johannes Schwarze, 1994. "Die Migration von Ost- nach Westdeutschland: Absichtserklärung und Realisierung," Discussion Papers of DIW Berlin 87, DIW Berlin, German Institute for Economic Research.

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