The Transformation of the East German Labour Market: From short-term Responses to long-term Consequences

Abstract

The article describes the short-term and long-term consequences of the German reunification on the East German labour market. It shows which active labour market policy measures have been taken and evaluates these interventions with regard to a possible Korean reunification. The immediate consequences included a rapid economic structural change, high unemployment and emigration. Many of the measures undertaken were crucial for the successful transformation, for example, by adaptation of qualifications. Others, such as job creation schemes, short-time working and early retirement had more sociopolitical impacts and caused long-term side effects on age structures of companies and the labour market integration of the younger generation. For a successful unification of labour markets such effects need to be considered when acting in the transformation phase.