A historically unique experiment is about to enter its second decade - German unification. Early hopes for a rapid and smooth economic transformation soon turned out to be overly optimistic. Despite massive financial transfers, the political promise of a "blooming landscape" remains a vision. Actual developments have left deep scars on the labor market, and the effects will be felt for decades to come. Was this outcome to be expected, perhaps even inevitable? What went wrong, and what were the available options? Or is the current state of Eastern German labor market in fact better than is commonly assumed?

In recent years, technological change, unemployment and industrial restructuring have highlighted training and the acquisition of skills as a policy issue. There is widespread concern that employees are insufficiently skilled, and it is recognized that this deficiency can have serious economic consequences. The situation is likely to become particularly urgent, as the dramatic increase in the share of temporary and part-time employment in the OECD leads to a decline in the incentives to train. This book, from the Centre for Economic Policy Research, provides a systematic account of the causes, consequences, and policy implications of failure in training provision and skills acquisition in the industrial world. It explains why the market mechanism leads people to under-invest in skills and examines the empirical outcome of these problems using a portfolio of examples for European countries.

A historically unique experiment is about to enter its second decade - German unification. Early hopes for a rapid and smooth economic transformation soon turned out to be overly optimistic. Despite massive financial transfers, the political promise of a "blooming landscape" remains a vision. Actual developments have left deep scars on the labor market, and the effects will be felt for decades to come. Was this outcome to be expected, perhaps even inevitable? What went wrong, and what were the available options? Or is the current state of Eastern German labor market in fact better than is commonly assumed?

This book examines the main policies available to government in dealing with the problem of high unemployment. It thereby gives policy makers and academics a convenient basis for making policy decisions in this area. The book attempts to evaluate the strengths and weaknesses of a wide range of policy options including demand management versus supply-side policy, subsidizing employment and training, restructuring labor market regulations, and reforming the welfare state. It also investigates the political process whereby unemployment policy decisions are made.

Technological change, unemployment and industrial restructuring have highlighted training and the acquisition of skills as a policy issue. There is widespread concern that employees are insufficiently skilled, and it is recognised that this deficiency can have serious economic consequences. The situation is likely to become particularly urgent, as the dramatic increase in the share of temporary and part-time employment in the OECD leads to a decline in the incentives to train. This 1996 book, from the Centre for Economic Policy Research, provides a systematic account of the causes, consequences, and policy implications of failure in training provision and skills acquisition in the industrial world. It explains why the market mechanism leads people to under-invest in skills and examines the empirical outcome of these problems using a portfolio of examples for European countries.