The German labor market in the Great Recession: shocks and institutions
Gehrke, Britta ; Lechthaler, Wolfgang ; Merkl, Christian
Institut für Arbeitsmarkt- und Berufsforschung, Nürnberg
IAB - Nürnberg
2017
34 p.
business cycle ; economic recession ; fiscal policy ; labour market ; short time working
IAB-Discussion Paper
14/2017
Business economics
English
Bibliogr.
"This paper analyzes Germany's unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for postunification Germany. This allows us to disentangle the role of institutions (short-time work, government spending rules) and shocks (aggregate, labor market, and policy shocks) and to perform counterfactual exercises. We identify positive labor market performance shocks (likely caused by labor market reforms) as the key driver for the 'German labor market miracle' during the Great Recession."
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