15 years of pension reform in Germany: old successes and new threats

The paper surveys the state of German pension system after a sequence of reforms aimed at achieving long-term sustainability. We argue that the latest reforms have moved pension provision in Germany in principle from a defined benefit to a defined contribution scheme, and that this move has stabilized pension finances to a large extent. We furthermore argue that the real economy consequences of global financial create threats to the core success factors of the reforms - cutting pension levels and raising mandatory pension age. Finally the paper discusses further possible reform measures, including the option to install a fourth pillar providing income in retirement through working after pension age. --Pension Financing,Financial Crisis,Fiscal Sustainability Survey,Germany

Participation Behavior of East German Women after German Unification

The paper studies the determinants of labor force participation by East German women after unification. To isolate the role of preferences on labor force participation from individual characteristics, we develop a panel data model that simultaneously explains participation, employment, and wages. The model, estimated for East and West Germany on the basis of the German Socio-Economic Panel, indicates that distinct preferences could explain the regional difference in participation rates at unification. Afterward East German women became less willing to participate, but the negative participation trend was offset on the aggregate level by changes in characteristics and wages promoting participation.http://deepblue.lib.umich.edu/bitstream/2027.42/39862/3/wp477.pd

Participation Behavior of East German Women after German Unification

The paper studies the determinants of labor force participation by East German women after unification. To isolate the role of preferences on labor force participation from individual characteristics, we develop a panel data model that simultaneously explains participation, employment, and wages. The model, estimated for East and West Germany on the basis of the German Socio-Economic Panel, indicates that distinct preferences could explain the regional difference in participation rates at unification. Afterward East German women became less willing to participate, but the negative participation trend was offset on the aggregate level by changes in characteristics and wages promoting participation.Transitional Economies, Labor Force Participation, Panel Data

Report No. 8: Evaluation of the Active Labor Market Program "Beautiful Serbia"

Final report on behalf of the United Nations Development Program (UNDP) Serbia and Montenegro, Bonn 2006 (84 pages)

Sectoral differences in wage freezes and wage cuts: evidence from a new firm survey

The paper provides evidence concerning incidence and sources of nominal wage rigidity in services and manufacturing, using a new and large employer survey on wage and price setting behaviour for Germany. We observe that wage freezes are more frequent in services than in manufacturing, whereas wage cuts are less frequent. The significant sector gaps do not vanish after controlling for relevant firm characteristics influencing the incidence of wage freezes and wage cuts, notably coverage by collective agreements and the degree of price competition on the product market. An analysis of firms' view on the reasons preventing wage cuts suggests that specific fear of excess worker turnover could explain distinct wage setting behaviour in services. --Nominal Wage Rigidity,Efficiency Wages,Manufacturing and Services,Germany

Participation Behavior of East German Women after German Unification

The paper studies the determinants of labor force participation by East German women after unification. To isolate the role of preferences on labor force participation from individual characteristics, we develop a panel data model that simultaneously explains participation, employment, and wages. The model, estimated for East and West Germany on the basis of the German Socio-Economic Panel, indicates that distinct preferences could explain the regional difference in participation rates at unification. Afterward East German women became less willing to participate, but the negative participation trend was offset on the aggregate level by changes in characteristics and wages promoting participation.Transitional Economies, Labor Force Participation, Panel Data

Downward Nominal Wage Rigidity in Services: Direct Evidence from a Firm Survey

The paper uses a new German employer survey on wage setting practices to analyze incidence and sources of nominal wage rigidity in services vs. manufacturing. We observe that wage freezes are significantly more frequent and wage cuts less frequent in services. Reasons preventing wage cuts reported by employers suggest that fear of excess worker turnover could explain this distinct behavior.nominal wage rigidity, efficiency wages, manufacturing and services, Germany

15 years of pension reform in Germany : old successes and new threats

The paper surveys the state of German pension system after a sequence of reforms aimed at achieving long-term sustainability. We argue that the latest reforms have moved pension provision in Germany in principle from a defined benefit to a defined contribution scheme, and that this move has stabilized pension finances to a large extent. We furthermore argue that the real economy consequences of global financial create threats to the core success factors of the reforms – cutting pension levels and raising mandatory pension age. Finally the paper discusses further possible reform measures, including the option to install a fourth pillar providing income in retirement through working after pension age

Dismissal Protection and Worker Flows in Small Establishments

The paper examines real and nominal wage rigidities.We estimate a switching regime model, in which the observed distribution of individual wage changes, computed from West German register data for 1976-1997, is generated by simultaneous processes of real, nominal or no wage rigidity, and measurement error. The fraction of workers facing wage increases that are due to nominal, but mostly real wage rigidity is substantial.The extent of real rigidity rises with inflation, whereas the opposite holds for nominal rigidity. Overall, the incidence of wage rigidity, which accelerates unemployment growth, is most likely minimized in an environment with moderate inflation.downward wage rigidity, real effects of inflation, collective bargaining, switching regime model,West Germany

Tarifpolitik, Entgeltflexibilität und Beschäftigung in Ostdeutschland (Colletive bargaining policy, wage flexibility and employment in eastern Germany)

"The paper explores wage setting practice in eastern Germany since unification. It gathers evidence to support the claim that economically non-viable collective agreements have fostered decentralized wage setting. First, we document the declining organization rates of both employers and employees, allowing a drift between collectively-agreed and actual wages. Second, we examine macroeconomic wage flexibility by estimating a switching regime model, in which the observed distribution of individual wage changes is generated by simultaneous processes of union, nominal or no wage rigidity. The results indicate that wages become more flexible during transition. Furthermore nominal wage rigidity, typical of decentralized bargaining, is much more common in eastern than in western Germany, while the opposite holds regarding union wage rigidity." (Author's abstract, IAB-Doku) ((en))Tarifpolitik, Flächentarifvertrag, Tariflohn, Lohnhöhe, Lohnentwicklung, Lohnflexibilität, Lohnstarrheit, Effektivlohn, Nominallohn, Firmentarifvertrag, Beschäftigungseffekte, Ostdeutschland, Bundesrepublik Deutschland