Where Did the German Labour Market Upswing Come From? – And How Can It Go On?

While the labour markets in Europe and around the world suffered from the great recession of 2008/2009 and the European debt crisis of 2012/2013, there was a robust labour market upswing in Germany. We consider the reasons behind this development by examining a broad set of candidate factors in an empirical analysis. Matching efficiency, the intensity of job creation, the growing labour force, and the declining propensity to separate explain most of the German labour market upswing. Not all of these factors are still applicable. Additionally, further efforts to improve job opportunities for the unemployed and to secure skilled workers are necessary.