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Title:East German unemployment : the myth of the irrelevant labor market PDF Logo
Authors:Merkl, Christian
Snower, Dennis J.
Issue Date:2008
Series/Report no.:Kiel working paper 1435
Abstract:This paper indicates that East Germany's unemployment originates primarily in the labor market, caused by the fast wage adjustment after German reunification. We model the resulting labor market traps in a search and matching framework, show that they are difficult to overcome, and provide empirical evidence. We argue that under these circumstances, demand-side policies are effective mainly when they increase the economy's overall productivity and thereby help overcome the labor market traps.
labor market trap
East Germany
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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