Germany: IMF recommends labour reforms

The International Monetary Fund has recommended Germany to undertake changes to its labour market to take into account the ageing of its population and the abuse of marginal low-paid jobs, often referred to as mini-jobs.

To avoid a negative impact on future economic growth and public finances, the IMF recommends that Germany implement reforms to boost employment and hourly wages.

More specifically, it should

• reduce the social security tax in the low-wage sector;
• finance full-day child care and school programmes;
• deregulate professions such as lawyers, accountants, architects and engineers.

Such reforms would increase labour demand in Germany and increase productivity of firms using those services, the IMF says.