AIAS Lunch Seminar Peter Auer (ILO) - 4 December 2008

“Comparison of labour markets and labour market reforms in France and Germany”

Draft summary of preliminary results

(Version 26 November 2008)
This summary of first results of a larger study on the comparison of labour markets and labour market reforms in two of the major countries of the EU (which together account for just under 40% of the overall EU15 GDP and labour force) will outline in broad strokes both the context of reforms, the major elements of the reforms and attempt a first analysis of the reforms. Rather than being a final product, the paper’s purpose is to stimulate discussion.

In a nutshell: _Both growth and employment were more dynamic in France than in Germany in the period 1995 to 2007 with a turnaround in the very last period. In this period strong growth in world markets coincided with sweeping labour market reforms so that many German commentators see the reforms as having supported the upturn. But there is a big controversy on this: the stakeholders of the reform usually see a major impact, while others are much more cautious and see the main factor in the booming world markets. However, it is also true that France couldn’t grasp the opportunities of globalisation as Germany did but this less due to reforms than the traditional dominance of the domestic sector and consumption in France.

In France, reforms of labour market institutions were more step-wise and gradual, dominated by a more constant macro approach of exemption from social contributions in order to lower labour costs for companies while maintaining income also through the minimum wage. For a time, also working time reduction played a role for job growth. Coming reforms, such as the introduction of a new integration benefit (RSA) that aims at activating those receiving social aid allocations, go some way towards German reforms. This is also the case of the overhaul of the public employment service, the aim being better reintegration of the unemployed.

There is concern in both countries on the quality of employment. Economic developments, a shift in labour supply behaviour and reforms of the labour have contributed to create non standard forms of employment and have led to a general de-standardisation of employment. This seems to have happened, but more so in Germany than in France. In France the specific way to intervene in labour markets through minimum wages and subsidizing non wage labour costs for employers has put a wage floor, which has no parallel in Germany._

Click here for the full summary

Short Bio Peter Auer

Peter Auer holds a PH.D in economics and the social sciences. He was formerly senior research fellow of the Science Center (WZB) in Berlin, head of the European Employment Observatory and co-founder and director of the Institute for Applied Socio-Economics, Berlin. At present chief of the employment analysis and research unit of the Economic and Labour Market Analysis Department of the Employment Sector, ILO, Geneva. He has worked extensively on labour market developments and on labour market policy and his recent research is on a new framework for labour market security in response to the challenges of globalization.

Recent publications

Active labour market policies around the world: coping with the consequences of globalization, ILO, second edition, 2008 (with U.Efendioglu and J. Leschke)
In search of optimal labour market institutions, in: Jorgensen H. and Madsen, P.K. (eds.) Flexicurity and beyond: finding a new agenda for the European Social Model. DJOF publishing, Copenhagen, 2007 (p.67-98)
Offshoring and the internationalization of employment: towards a fair globalisation (with D. Meda et G. Besse), IILS, 2005
Meeting the employment challenge: Argentina, Brazil, and Mexico in the Global Economy (with Janine Berg and Christoph Ernst), Lynne Rienner, London, 2006
L’introuvable sécurité de l’emploi (with B. Gazier), Flammarion, Paris, 2006

Day: Thursday 4 December 2008
Time: 12.15 – 13.15 hrs.
Location: AIAS, 3rd floor building M, Plantage Muidergracht 12
Enrol: Please send us an email before Wednesday 3 December 12.00 hrs.
A sandwich will then be provided.
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