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

F
I
UK
Agriculture
1991
4.0
5.6
7.2
2.3
1999
2.6
4.4
5.1
1.9
Industry (excl. constr.)
1991
29.4
19.8
25.4
19.0
1999
22.3
16.7
24.1
16.4
Construction
1991
7.3
7.2
6.8
7.8
1999
7.5
6.1
6.6
6.4
Services
1991
59.2
66.6
61.9
70.8
1999
67.8
72.0
66.3
75.2
Source: National accounts
75
80
85
90
95
100
105
110
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Germany
West G
East G

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Table 3.12: Low paid services
Employment rate gap between the US
and…
Germany
France
Italy
United
Kingdom
Service sector
8.5
6.7
11.2
4.0
Wholesale and retail
2.2
2.4
3.3
1.6
Hotels and restaurants
2.2
2.4
2.0
1.4
Transport and communications
0.1
0.1
0.1
0.0
Real estate and business activities
0.5
0.1
0.9
0.2
Education
1.4
0.8
1.3
0.1
Health and social work
1.5
0.4
3.0
0.3
Community, social and personal
0.7
0.6
0.6
0.5
OECD Employment Outlook 2001
Dynamics of unemployment and participation
As in many European countries, the main feature of unemployment developments in Germany
over the last three decades has been the slow reaction to economic upturns which resulted in an
increased level of unemployment after each of the adverse shocks that hit the economy. It is a
standard argument (cf. the overview in Wyplosz (2000)) that this (quasi) hysteresis is a
symptom of too rigid labour market institutions. Rigid structures may have existed well before
the unemployment crisis, but became binding only when the economy was hit by adverse
shocks. One indicator of structural unemployment is the so-called Beveridge curve, i.e. the
relation of vacancies to unemployment. The curve has shifted outward in every decade since the
1970s (Figure 3.13) and points to an increasing mismatch of skills in the labour market. Another
indication for a structural problems is the high percentage of long-term unemployment, which
accounts for half the total unemployment: Of the 7.9% unemployed in 2000, 3.9 percentage
points were due to persons who had been unemployed for more than twelve months.