Paper
Trade and Unemployment in Germany: An Empirical Exploration and Some Theories
- Authors:
- Tobias Weirowski; Martin Klein
- Abstract
- This paper investigates the link between unemployment and external trade in Germany, using data on unemployment, international trade and economic activity for the 16 German federal states (Länder). With panel data econometrics we show that international trade as measured by state-by-state trade shares has a significantly negative impact on state-by-state un-employment rates. We investigate to what extent this reflects mercantilist tendencies embedded in the political economy of the Federal Republic but we find no clear evidence in favor of simple mercantilism. We suggest three alternative explanations, which are linked to the structural rigidities of the German labor market, government involvement in the education and training system and certain labor market policies which provide government-subsidized unemployment insurance benefitting (mainly) export industries.
- Keywords
- JEL; F14; F15; O50; International Trade; Unemployment; Panel Study
- StartPage
- 73
- EndPage
- 79
- Doi