The Unexpected Appearance of a New German Model
| Date | 01 March 2015 |
| Published date | 01 March 2015 |
| DOI | http://doi.org/10.1111/bjir.12055 |
| Author | Werner Eichhorst |
The Unexpected Appearance of a New
German Model
Werner Eichhorst
Abstract
Most Continental European labour markets and welfare states have experi-
enced a substantial transformation. Germany is a case in point as it exhibits
increasing levels of employment and a growing share of low pay and non-
standard work. The article claims that changes in labour market institutions
play a major role, but changes in industrial relations at the sectoral level and
individual firms’ staffing practices are equally important. Regarding labour
market institutions, the pattern found in Germany shows sequences of reforms
addressing the margins of the labour market and contributing to a growing
dualization of employment. This dualization trend was reinforced by micro-level
dynamics in industrial relations and company employment practices, where we
can observe growing reliance on mechanisms of internal flexibility for the skilled
core workforce and increasing use of non-standard types of employment in less
specifically skilled occupations, in particular in the private service sector.
Hence, the adjustment of the German model can only be understood by taking
into account the interaction of policy change and actors’ adaptive behaviour.
1. Introduction
After some decades of mainly negative perception both from within
Germany and abroad, the German employment ‘model’ is attracting quite
some attention again. This is mainly due to its apparent success in weathering
the recent global economic crisis without encountering major job losses, but
in contrast exhibiting decreasing unemployment rates and record levels of
jobs created (Rinne and Zimmermann 2012). In fact, after a long period of
stagnation, Germany now has one of the highest employment rates in Con-
tinental European countries and is no longer far behind countries such as
Denmark and Sweden or the Netherlands, and is basically in line with the
UK as Figure 1 shows. Unemployment has also been decreasing significantly
Werner Eichhorst is at IZA — Institute for the Study of Labor.
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British Journal of Industrial Relations doi: 10.1111/bjir.12055
53:1 March 2015 0007–1080 pp. 49–69
© John Wiley & Sons Ltd/London School of Economics 2014. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
in Germany in the last few years (Figure 2). Quite unexpectedly, as it was
often seen as a laggard with a persistent weakness in job creation, Germany
is now on a par with former role model or benchmark countries. Further-
more, accelerated job creation in Germany cannot only be attributed to the
emergence of an additional layer of ‘bad jobs’ at the margin of the labour
FIGURE 1
Employment/Population Ratios in Selected Countries, 1995–2012.
50
55
60
65
70
75
80
Denmark
France
Germany
Italy
Netherlands
Sweden
UK
United States
Source: OECD.
FIGURE 2
Unemployment Rates in Selected Countries, 1995–2012.
2
4
6
8
10
12
Denmark
France
Germany
Italy
Netherlands
Sweden
UK
United States
Source: OECD.
50 British Journal of Industrial Relations
© John Wiley & Sons Ltd/London School of Economics 2014.
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