Wednesday, August 01, 2007

Bundesbank On German Labour Market

An analysis restricted to the number of persons in work is of no more than limited informative value, however. For example, the relatively favourable growth in per capita employment in Germany is due exclusively to what was – even in international terms – a sharp increase in jobs with reduced working hours, in particular, the expansion of “minijobs” in two surges from 1997 to 1999 and from 2003 to 2004. This idiosyncratic effect is also reflected in the average annual working hours of part-time workers, which has been falling in Germany over the past few years and is now clearly below the euro-area average. Furthermore, there has been a comparatively strong increase in the percentage of part-time workers who would actually prefer longer paid working hours.3 In this respect, the sharp increase in jobs with a small number of working hours in Germany points to structural problems in the labour market. The total number of hours worked in the economy as a comprehensive measure of labour utilisation does show a comparatively sharp decline for Germany (-314%) in the period under review. According to OECD estimates, the total number of hours worked in Germany’s European partner countries has, by contrast, increased (ranging from 314% in France to 37% in Ireland). The figure went up by 912% in the USA and as much as 7% in the United Kingdom.

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