European Economy. Economic Papers. Germany's growth performance in the 1990's

Figure 3.13 : Beveridge Curve
Source: BA; national unemployment concept, "reported" vacancuies; figures for june of each year
In the past decade, the strong regional dimension of unemployment has been most remarkable.
In February 2002, non-seasonally adjusted unemployment rates ranged from 5.6% in 
Baden-
Württemberg
to 20.8% in 
Sachsen-Anhalt
, or 8.3% in West Germany compared to 19.2% in the
East
43
.
The unemployment rate of female workers is, at 8.1% in 2001, relatively close to the total
unemployment rate of 7.9%. The unemployment rate of workers under the age of 25 is
somewhat higher, at 9.3%, but younger workers are relatively less disadvantaged in the German
labour market than in most other EU Countries. Unemployment of older workers, however, is
43
Unemployment figures in national definition; Bundesanstalt für Arbeit.
0
1
2
3
4
5
0
2
4
6
8
1 0
1 2
1 4
u n e m p lo ym e n t ra te
vacancy rate
1965
2001
1983
1975
1990

---

significantly above average and older women face particular difficulties (older workers’
unemployment rate in 2000 was 12.6%, for women 14.1%)
44
.
The risk of being unemployed is strongly related to the skills level (Table 3.13). Low skilled
workers in Germany have a share in active population of 17% but their share of unemployment
is 27%. The gross probability for a low skilled worker of being unemployed is therefore
increased by a factor of 1.6, compared to the average worker. This factor is slightly higher than
in France and well above the value for Italy. The comparative disadvantage is higher in West
Germany than in the East (where the incidence of unemployment is higher among all skills
groups). Furthermore, unemployment of low skilled workers increased by 7% from 1995 to
2000, whereas that for highly skilled persons decreased by 9%. In the longer run, the education
level of working age population is increasing (Hummel /Reinberg (2001)) and employment of
low-skilled workers is declining, both in absolute terms and relative to the demand for medium-
and high-skilled workers. From1991 to 1998, more than one in five low-skills jobs was lost, a
total of 1.2m. Medium-skills jobs declined by 6% and high-skills jobs increased by as much as
31% (or 1.3m) over the same period (Reinberg (1999)).