ILPC 2026

The aim of this research is to challenge the mainstream narrative of a German ‘job miracle’ during the 2008 financial crisis. It attempts to highlight the potential policy traps in the neoliberal model of an efficient high employment labour market regime. The research study analyse the historical evolution of the German labour market reforms and focus both on the strength and the weakness of the German experience. The project aims to go beyond the labour market performance to include macroeconomic and gender perspectives. It takes a closer look at the changing employment structure in Germany, low-wage sector boom and social costs of the alleged ‘job miracle’. The study examines changing employment dynamics in Germany by analysing expansion in low-wage employment, working poverty, and temporary employment. It also changes in the demographics and female labour force participation in German labour force. The research draws a comparative study between Germany and France from the perspectives of Esping-Andersen’s welfare regime typology of welfare capitalism and attempt to find evidences of convergence from the continental-conservative model towards the liberal model of increased flexibility, precarity and low levels of work security. Long considered the classic coordinated market economy featuring employment security and relatively little employment precarity, the German labour market has undergone profound changes in recent decades. The transition of Germany from its status of “sick man of Europe” in the post-unification years to current high employment economy compared to other countries in the EU termed as German “employment miracle” is central to this research. Some scholars present the ‘German model’ seen with the adoption of Hartz reforms introduced between 2003 and 2005 as a successful model for other European labour market. Although employment overall has increased, there has been a simultaneous significant increase in earnings and wage inequality. The consequences of this far-reaching deregulation of the labour market have been growing social insecurity and an increasing importance of precarious employment. With unemployment rates crossing over 10 per cent in most European economies, a number of governments shared desire of bringing in reforms to liberalise the labour market. The reduction of unemployment benefits, cuts in welfare state expenditure, re-structuring social security system and weakening of collective agreements became the core part of these reforms. The declining importance of full-time and non-limited employment is associated with a growing number of workers who, due to their employment status, are confronted with low job security and little influence on their working situation. The debate on “precarious employment” is closely linked to the debate on the distribution of risks and of societal and economical achievements. This research discusses the claimed “miracle” argument in the German labour market and finds answers to explain its impact on the welfare state. The contrasted evolution of employment and unemployment of men and women in France and Germany during the 2000s is empirically analysed. The research highlights the following questions in some depth after a tour d’horizon into the changing patters of labour market related issues of Germany: Has a German employment miracle really existed or was it only limited to women workers in atypical jobs? Was the German employment success mainly the result of favourable macro-economic conditions, in particular high competitiveness in international trade (export) based on diversified quality production in manufacturing and low unit wage costs? Or if the true miracle in the German labour market is the capacity to persuade workers in accepting low wages, relative to productivity improvements, than in other countries. The research takes in to consideration the Hartz Reforms, increasing flexibility of wage determination & collective bargaining, allocating working time accounts and share of women in the growth of atypical employment. The trade union responses to precarious employment in Germany are also taken in to account. In methodological terms the proposed research aims to employ socio-economic and interdisciplinary approach with structural analysis. It makes use of institutional economics and applied economics with a comparative approach to study the labour market evolution in Germany and France.