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Labor and Income

The labor market situation of recent years shows: High employment and low unemployment are possible with the right policies and in a flourishing economy.

About the topic

The German labor market has been in a state of flux in recent years: Due to structural change and digitization, jobs have been lost in some sectors, for example in mining or industry, but at the same time many new jobs have been created in the digital world of work. However, despite recent successes, millions of people are still looking for a job, although skilled workers are becoming scarce as a result of demographic change. Going forward, therefore, the goal remains to increase labor force participation, promote occupational mobility, make it easier for people to get into jobs, and keep the shortage of skilled workers at bay for the economy.

Meanwhile, the demands on employees are changing rapidly. Digitalization and internationalization are shaping the labor economics. Aging and heterogeneous workforces pose difficult tasks for HR policy. Companies are well equipped if they succeed in balancing the different requirements.

Employees' earnings, i.e. wages and salaries, can be freely negotiated with their employers - in some cases, the leeway is limited by collective agreements. Wage policy also determines how many skilled workers employers can retain. Overall, wages have risen steadily over the past few years, which has led to an increase in prosperity.

German Economic Institute (IW) German Economic Institute (IW)

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What factors influence the career ambitions of people with disabilities?
Carolin Fulda / Oliver Stettes IW-Report No. 25 10. May 2024

What factors influence the career ambitions of people with disabilities?

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Artificial Intelligence – Will Boosted Productivity Lead to Better Pay?
Jan Büchel / Roschan Monsef IW-Trends No. 2 10. May 2024

Artificial Intelligence – Will Boosted Productivity Lead to Better Pay?

Artificial intelligence (AI) is already being used in a wide variety of applications both inside and outside the corporate world.

IW

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Manager im Gehaltsgespräch mit jungem Mitarbeiter.
Hagen Lesch IW-Trends No. 2 18. April 2024

German Wage Policy between Inflation and Stagnation: Are Conflicts with the Aims of Monetary Policy Looming?

After the economic and financial crisis of 2008/9, the German labour market soon began to recover, creating scope for a comparatively expansive wage policy.

IW

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CEO Manager sitzt am Arbeitsplatz und telefoniert.
Andrea Hammermann / Oliver Stettes IW-Report No. 16 28. March 2024

Orphaned executive chairs in German companies

In 2023, half of the companies in Germany reported increasing problems in filling vacancies for management positions because employees are not aiming for a career. Larger companies are less affected than small companies.

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Christina Anger

Dr. Christina Anger

Head of the Research Group Microdata and Method Development

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Helena Bach

Helena Bach

Economist for Wage Policy and Collective Bargaining

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Wido Geis-Thöne

Dr. Wido Geis-Thöne

Senior Economist for Family Policy and Migration Issues

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Andrea Hammermann

Dr. Andrea Hammermann

Senior Economist for Working Conditions and Human Resource Management Policies

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Andrea Kurtenacker

Andrea Kurtenacker

Head of Professional Participation and Inclusion Research Unit and Project management REHADAT

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Hagen Lesch

Dr. Hagen Lesch

Head of Labour Economics and Collective Bargaining Policy Research Unit

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Axel Plünnecke

Prof. Dr. Axel Plünnecke

Head of Education, Innovation and Immigration Research Unit

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Holger Schäfer

Holger Schäfer

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Christoph Schröder

Christoph Schröder

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Oliver Stettes

Dr. Oliver Stettes

Head of Labour Economics and Collective Bargaining Policy Research Unit

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Sandra Vogel

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Senior Researcher for Industrial Relations

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What factors influence the career ambitions of people with disabilities?
IW-Report No. 25 10. May 2024

What factors influence the career ambitions of people with disabilities?

Carolin Fulda / Oliver Stettes

Many companies in Germany report having difficulties not only in recruiting employees, but also in filling vacant management positions.

IW

Read study
Artificial Intelligence – Will Boosted Productivity Lead to Better Pay?
IW-Trends No. 2 10. May 2024

Artificial Intelligence – Will Boosted Productivity Lead to Better Pay?

Jan Büchel / Roschan Monsef

Artificial intelligence (AI) is already being used in a wide variety of applications both inside and outside the corporate world.

IW

Read study
Securing skilled workers through immigration to universities
IW-Report No. 22 4. May 2024

Securing skilled workers through immigration to universities

Wido Geis-Thöne

Against the backdrop of demographic change, Germany is increasingly dependent on skilled labour from abroad to secure growth and prosperity.

IW

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Are Conflicts with the Aims of Monetary Policy Looming?
IW-Trends No. 2 18. April 2024

German Wage Policy between Inflation and Stagnation: Are Conflicts with the Aims of Monetary Policy Looming?

Hagen Lesch

After the economic and financial crisis of 2008/9, the German labour market soon began to recover, creating scope for a comparatively expansive wage policy.

IW

Read study
Megatrends and management as a driver of change
IW-Report No. 19 10. April 2024

Leadership in transformation: Megatrends and management as a driver of change

Lena Suling / Julia Wildner

Leadership dynamics in companies are subject to constant change in order to meet the challenges of their time. Today, the greatest influences result from developments such as demographic change, globalization, individualization, structural change and technologization in the economy.

IW

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