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By Uwe Blien & Frank den Butter 1646

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The participation growth in the recent past has mainly resulted from the influx of young and healthy people. In the next decades, however, further participation growth should come from elderly who stay in employment for a longer period. 2. In the second place labour participation is selective on health conditions. g. Kerkhofs et al. 2000). If, however, labour participation will have to increase, the additional number of participants should come from the potential of people that have a larger statistical chance on sickness and disability.

In that respect, the argumentation of Kromphardt regarding wage rate developments and employment growth I found not convincing. He stresses the development of collective wage agreements and of the real wage position of employees, but he neglects the development of total wage costs in relationship to productivity growth. Furthermore, Kromphardt mentions, illustrated in two accompanying figures, that both in times of relative real wage increases and of real wage declines the employment increased.

Gradually the economic problems increased. Economic growth slowed down, the unemployment rate increased again and again. That was already the case in the 80s. The German economy was not able to meet this new, unexpected and huge challenge. The economic development worsened, and in recent years Germany showed up very low in the economic ranking among EU-countries. Old recipes did not work anymore, necessary changes could not be realised and the confidence of all actors was remarkably low. While the Netherlands under such circumstances was able in 1983 to change its economic policies, it seems that the Germans are not able yet to do the same.

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