A historically unique experiment is about to enter its second decade - German unification. Actual developments have left deep scars on the labor market, and the effects will be felt for decades to come. Or is the current state of Eastern German labor market in fact better than is commonly assumed?

Employment Policy in Transition: The Lessons of German Integration for the Labor Market.- 1. Introduction.- 2. The Post-Unification German Labor Market.- I. Analysis of the German Labor Market Problem.- 1. Wages and Structural Adjustment in the New German States.- 2. East/West-Wage Rigidity in United Germany.- 3. Early Retirement in East and West Germany.- 4. Employment Effects of Newly Founded Businesses in East Germany.- 5. Earning Dynamics in the East German Transition Process.- II. Policy Options.- 1. Eastern Germany Since Unification: Wage Subsidies Remain a Better Way.- 2. Economic Efficiency and Social Acceptance of Wage Subsidies.- 3. Revenue-Sharing Subsidies as Employment Policy: Reducing the Cost of Stimulating East German Employment.- 4. Investment Wages and Capital Market Imperfections.- 5. Public Sector Sponsored Continuous Vocational Training in East Germany: Institutional Arrangements, Participants, and Results of Empirical Evaluations.- 6. Active Labor Market Policies in Central Europe: First Lessons.- Indices.- 1. Authors Index.- 2. Subject Index.

The book summarises the major lessons from the East German labor market in transition and puts them into context with the first experiences in the other transition countries. After an introduction to the subject and an overview of labor market developments in East Germany, part 1 of this volume turns to specific issues of adjustment: wage trends, business start-ups, and early retirement. Part 2 reviews the policy options available in the transformation process and their labor market implications: wage subsidies, profit sharing, invested pay, further education, and various forms of active labor market policy. The final chapter draws parallels with the experience of other transition economies.

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