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Welfare for the Unemployed in Britain and Germany

Who Benefits?

Frances McGinnity

In recent decades, the problem of unemployment has generated fierce political and academic discussion on how national governments should address this issue. This book sheds light on a key debate in unemployment policy – that of whether unemployment benefits should be insurance-based or means-tested. It carefully compares the impact of the British and German benefit systems on poverty, the duration of unemployment and the spread of workless households during the 1990s.
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Chapter 2: Comparing Labour Market Trends and the Composition of the Unemployed

Frances McGinnity


This chapter compares unemployment and labour markets in Britain and Germany at a macro-level. The primary aim of this and the next chapter, which compares welfare provision for the unemployed, is to provide the background to allow us to interpret the empirical findings that form the core of the book. As the empirical analysis presented later in the book is longitudinal, some of the material in this chapter compares changes in the labour markets and unemployment over time. Where changes over time are not so relevant, we compare the labour markets from a cross-sectional perspective, normally in 1996 as this is at the end of the period analysed. Where data from other years is used, the year is specified. For the most part we compare Britain and Germany, but where relevant we distinguish East and West Germany after 1992. Section 2.1 gives a brief account of recent macroeconomic change in Britain and Germany. Section 2.2 discusses the measurement of unemployment and compares trends in overall unemployment and the composition of the unemployed. Section 2.3 examines trends in employment, particularly labour force activity rates, since the 1980s. Section 2.4 considers the role of the education and training systems in understanding unemployment. Section 2.5 looks at the distribution of employment and unemployment within households. We conclude by reflecting on some of the differences between the British and German labour markets. 2.1 PATTERNS OF MACROECONOMIC CHANGE IN BRITAIN AND GERMANY In Britain, the 1980s were characterised by considerable macroeconomic turbulence (see...

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