German Job Mobility and Wages

Unemployment has recently been a major concern of policy-makers across Europe. Job flexibility was considered a major cause for the differences in the development of unemployment between the European Union (EU) member countries and the USA (see OECD, 1994a, and Bean, 1994, for instance). It is true that the evolution of unemployment had been against western Europe in the last two decades. Figure 12.1 contains the OECD standardised unemployment rates for the period 1967–1994 for the USA, European Union, Japan and the Nordic Countries (NC) in Europe, and for some selected countries such as Western Germany, Canada, Sweden, France and the UK. The remarkable rise in unemployment in the European Union in comparison to the USA is indisputable even for such stable countries as Germany. Japan, and for a long time also the NC, have done quite well in contrast to both the USA and the European Union. The NC are well-known for their active labor market policy, and Japan has its myth of superior work habits.