UK Vs. Germany Economy and Labor Market

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The labor market entails the relations between the demand for labor, in one hand, and labor supply, on the other hand. Labor demand is defined by the amount of labor firms demand in order to produce certain amount of goods and services. Labor supply refers to the productive segment of the population that is determined by the size of the population. Within the labor market, workers can be classified as either economically active (the employed and the unemployed) or economically active. The employed encompasses people in paid employment or in self employment while the unemployed refers to people who are not working but have actively been looking for job and are willing to start work immediately. A person is classified as economically inactive if they are neither looking for work nor are they ready to start work. The labor force participation and the unemployment rate are major indicators of the health of an economy. This paper will compare the economies of the United Kingdom and Germany as well as their labor market (Shimer 2010).

Germany has the largest economy in Europe and the fifth largest in the world. Germany is known for its high quality machinery, vehicles, chemicals and household equipment that form the bulk of its exports. Its vast manufacturing industry has thrived as a result of the existence of a large pool of highly skilled labor force. The country boasts of the world’s most advanced networks in energy, roads, aviation, telecommunications, rail and roads. The German economy is dominated by small and medium-sized enterprises that provide employment to 70 percent of the country’s labor force. While SMEs in the rest of the world are too small to enjoy the economies of scale or even access the international market, Germa...

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Bibliography:

Federal Statistical Office 2014, “Facts & figures.” Viewed on 11th March 2014< https://www.destatis.de/EN/Homepage.html>

Giudice, R, Kuenzel, R & Springbett, T 2012, “UK economy: The crisis in perspective.” Abingdon; Routledge.

Krebs, T & Scheffel, M 2013, “Macroeconomic evaluation of labor market reform in Germany.” IMF Working Paper, Research Department. Viewed on 11th March 2014

Office of National Statistics 2014, “Labor market.” Viewed on 11th March 2014

Shimer, R 2010, “Labor Markets and Business Cycles.” Princeton: Princeton University Press.

Zimmermann, KF 2007, “Immigration policy and the labor market: The German experience and lessons for Europe.” Berlin: Springer.

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