nstitut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Rese Bundesagentur für Arbeit (Federal Employment Agency, Germany) 1 The German labour market in a comparative perspective – with special reference to the employment of older persons Presentation for the conference on ‘The European Employment Strategy – Opportunities and Limits for the New Member States' Budapest, 20th October 2005 Susanne Kraatz, Thomas Rhein
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Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)1
The German labour market in a comparative perspective – with special reference to the employment of older
persons
Presentation for the conference on ‘The European Employment Strategy – Opportunities and Limits for the New Member States'
Budapest, 20th October 2005
Susanne Kraatz, Thomas Rhein
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)2
Outline
The employment targets of the EES
Germany‘s labour market performanceEast GermanyThe ageing society and older workers
German policy responses
The ECE member countries in comparisonAge-related employment: the youth and the elderly
Conclusions
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)3
Achieving full employment ->
Overall employment rate of 70 % Female employment rate of 60 % Older workers‘ employment rate of 50 % - raising the average exit rate by five years
Improving quality and productivity at work
Strengthening social and territorial cohesion
The European Employment Strategy (EES) as Part of the Lisbon Agenda
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)4
Performance of the German Labour Market (1):
Germany EU-15 EU-25
Overall rate 65.0 64.7 63.3
Female rate 59.2 56.8 55.7
55-64 41.8 42.5 41.0
15-24 (2003) 44.0 39.7 36.7
Source: Eurostat
Employment rates, 2004
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)5
Overall Employment Rates, 2004, in Comparison
75,7
73,172,1 71,6
65,0 64,763,3
56
5860
6264
66
6870
7274
76
DK NL S UK DE EU -15 EU - 25
Source: Eurostat
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)6
Performance of the German Labour Market (2):
Germany EU-15 EU-25
Overall Rate 9.5 8.1 9.0
Female Rate 10.5 9.3 10.2
55-64 12.8 6.8 7.0
15-24 15.1 16.6 18.6
Source: Eurostat
Unemployment rates, 2004
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)7
Slight improvement in terms of (un)employment after 1997, but rising unemployment since 2001 and steady fall in „standard“ (full-time, permanent) jobs
Employment rates below EU targets and other EU countries, especially for older workers
Situation for younger people still relatively good
Unemployment is conceived as the biggest problem of Germany‘s society
Performance of the German Labour Market (3):
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)8
Low growth rates
High (non-wage) labour costs (social charges)West Germany: 32 €; East Germany: 19 €; Slovenia: 9 €; Slovak Rep.: 3 € (2002)
Growing international competition
Too much regulation, e.g. employment protection, too generous social benefits (disputed)
Problem groups and regions:- East Germany- Older people- Unskilled workers
Aspects of German Labour Market Problems
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)9
The East German Labour Market (1):
Overall Employment rates
50,0
55,0
60,0
65,0
70,0
75,0
1991 1993 1995 1997 1999 2001 2003
Persistent differences in employment rates…
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)10
The East German Labour Market (2):
Unemployment (national definition)
0,02,04,06,08,0
10,012,014,016,018,020,022,0
West Germany
East Germany
… and unemployment rates…
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)11
The East German Labour Market (3):
… despite massive East-West migration …- More than 3 million East Germans went West since 1989, mainly young people
- Net emigration since 1989: more than 1.5 million persons
… and huge financial West-East Transfers- Almost 1.3 billion Euros between 1991 and 2003
High female labour force participation
Lower wages than in the West…
… but also low productivity, apart from some regions- East German GDP per Head at 64.3 % of West level (2004)
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)12
The „Greying“ of the Labour Market
Declining birth rates and rising life expectancy…
…constitute the big challenge of the future…- not only for Germany, but also for other European countries
… and will lead to a shrinking and ageing workforce
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)13
Projections of the potential labour force in Germany
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)28
Strategies for older workers in ECE Countries (1)
A glance at the Czech Republic and Estonia:
Reforming the pensions was crucial.
The often underestimated role of Gender
Active Labour Market Policies: Discrimination of older unemployed
Employability and „soft measures“ –> Comprehensive action plans
most of the implementation to come.
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)29
Strategies for older workers in ECE Countries (2):Similarities and differences
Similar solutions, similar risk as in (East-)Germany:
One-sided instead of comprehensive practice
Differences: Etatism bears problems of implementation
Networking across levels and actors has to be evolved
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)30
Strong differences in GDP per capita between ECE countries and Germany…
… but catching-up is under way (new „Celtic Tigers“?)
ECE countries are far from being a homogeneous group
East Germany: financial transfers and labour emigration are not sufficient to overcome the transformation crisis
Conclusions (1)
Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research)
Bundesagentur für Arbeit (Federal Employment Agency, Germany)31
Some assets of ECE member countries: Labour costs are low
Less regulation of the labour market
Political structures are less sclerotic
Elite consensus about Europeanization
Common challenges:- Low employment rates, high unemployment (not everywhere!)- Ageing society Need for a lifecycle approach to work, as proposed by the Employment Guidelines of the EU- Comprehensive approach towards employment of older workers is