Reasons for the Successful German Economy: Analysis of Imports and Exports, Labor and Social Welfare
Abstract
Germany’s robust economy, labor market reforms, expansive social welfare initiatives, and the structure of its educational system collectively contribute to its status as an influential and appealing nation on the global stage. The paper analyzes the reasons for the booming German economy from three aspects: imports and exports, labor, and social welfare. The nation has witnessed substantial export growth, particularly compared to its European counterparts. This economic achievement can be attributed to elements like practicing wage restraint and capitalizing on the opportunities presented by China’s market liberalization, resulting in a significant upswing in exports to China. The labor market in Germany has witnessed substantial enhancements since 2005, marked by the creation of jobs and a remarkable reduction in the unemployment rate. These transformations can be linked to labor market reforms initiated in the early 2000s, commonly called the Hartz reforms. Germany boasts an extensive social welfare system with historical roots dating back to the 19th century. This system encompasses various life facets, including healthcare, pension provisions, accident coverage, nursing care, and unemployment support. The adaptability of this welfare system is underscored as it remains open to ongoing negotiations and adjustments, particularly in response to demographic shifts.
References
- Smith, N. (2017). Workers Made Germany Into the World’s Best Economy. https://www.bloomberg.com/tosv2.html?vid=&uuid=960fee2d-4fd2-11ee-a656-b0834964e2b3&url=L25ld3MvbmV3c2xldHRlcnMvMjAyMy0wNi0wNy93b3JsZC1lY29ub215LWxhdGVzdC1nZXJtYW55LWlzLXJ1bm5pbmctb3V0LW9mLXdvcmtlcnM=
- KPMG. (2023) Economic key facts Germany. https://kpmg.com/de/en/home/insights/overview/economic-key-facts-germany.html\
- Federal Ministry for Economic Affairs and Climate Action. (2021). Facts about German foreign trade. https://www.bmwk.de/Redaktion/EN/Publikationen/Aussenwirtschaft/facts-about-german-foreign-trade 2022.pdf?__blob=publicationFile&v=1#:~:text=In%202021%2C%20Germany%20maintained%20its,%25%20(2020%3A%207.2%25).
- Marin, D.(2015). What has contributed to Germany’s exceptional export performance compared to other European countries? https://www.bruegel.org/blog-post/europes-export-superstars
- Sandkamp, A.(2023). German economy’s dependence on China: Critical for individual products. https://www.ifw-kiel.de/publications/news/german-economys-dependence-on-china-critical-for-individual-products/
- Bouvard, F., Rambert, L., Romanello, L., & Studer, N. (2013). How have the Hartz reforms shaped the German labour market. Trésor Economics, 110.
- Boyle, N., Schünemann, W.(2009). The Malleable Politics of Activation Reform: the ‘Hartz’ Reforms in Comparative Perspective. EUSA conference paper.
- Facts about Germany. (Access on 10, September, 2023). https://www.tatsachen-ueber-deutschland.de/en/germany-glance/strong-welfare-state
- Britannia. Geography & Travel. (Access on 10, September, 2023). https://www.britannica.com/place/Germany/Health-and-welfare
- IOPS Countries profiles. (2019). https://www.iopsweb.org/resources/42368824.pdf
- Becker, S., Buslei, H., Geyer, J., Hana, P.(2022). The effect of pension wealth on employment. Deutsche Post Foundation.