Labor Market Policy in the Great Recession: Some Lessons from Denmark and Germany

CEPR Reports and Issue Briefs from Center for Economic and Policy Research (CEPR)

Abstract: This paper reviews the recent labor-market performance of 21 rich countries, with a focus on Denmark and Germany. Denmark, which was widely seen as one of the world's most successful labor markets before the downturn, has struggled in recent years. Germany, however, has outperformed the rest of the world's rich countries since 2007, despite earlier labor-market difficulties. Labor-market institutions seem to explain the different developments in the two economies. Danish institutions – which include extensive opportunities for education, training, and placement of unemployed workers – appear to perform well when the economy is at or near full employment, but have not been effective during the downturn. German labor-market institutions, which emphasize job security by keeping workers connected to their current employers, may have drawbacks when the economy is operating at or near full employment, but have performed well in the Great Recession. The paper also discusses lessons for U.S. labor-market policy.

Keywords: Great Recession; recession; labor; labor policy (search for similar items in EconPapers)
JEL-codes: E E2 E24 E3 E6 E65 J J2 J21 J3 J31 J33 J38 J6 J62 J65 J68 J8 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-05
New Economics Papers: this item is included in nep-eec, nep-eur, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:epo:papers:2011-12

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