This paper overviews labor market analyses presented in the annual reports of the German Council of Economic Experts (GCEE). During the previous decades this topic has taken center stage due to the high and persistent unemployment in Germany. Major topics include collective wage policy and the institutional framework governing the German labor market. In this context the GCEE firstly argues for wage settlements which favor the creation of new jobs. More specifically, nominal wage increases should somewhat fall short of trend productivity growth plus the GDP-inflation rate. Moreover, the GCEE pays special attention to the development of the wage structure. Secondly, reforms for more flexibility on the labor market are called for. They should aim at making it easier for the unemployed to gain access to the labor market. These demands for reforms refer, for example, to the legislation of dismissal protection and the unemployment insurance system. The success of the GCEE’s proposals is mixed, however.
Franz, Wolfgang (2013), Die Arbeitsmarktanalyse in der wirtschaftspolitischen Beratung des Sachverständigenrates, ZEW Discussion Paper No. 13-074, Mannheim. Download