Skill-biased liberalization: Germany’s transition to the knowledge economy

Sebastian Diessner, Niccolo Durazzi, David Hope

Research output: Contribution to journalArticlepeer-review

Abstract

We conceptualize the evolution of the German political economy as the co-development of technological and institutional change. We introduce the notion of skill-biased liberalization to capture this process and we contrast it with the two dominant theoretical frameworks employed in contemporary CPE scholarship—dualization and liberalization. Integrating theories from labor economics, we argue that the increasing centrality of high skills that are complementary in production to information and communications technology (ICT) has weakened the traditional complementarity between specific skills, regulated industrial relations, and generous social protection in core sectors. We show how the liberalization of industrial relations and social protection has in fact been instrumental for high-end exporting firms to concentrate wages and benefits on increasingly important high-skilled workers. We find strong evidence in support of our alternative perspective based on descriptive statistics, union and industry documents, and 21 elite interviews.
Original languageEnglish
JournalPolitics and Society
Publication statusAccepted/In press - 19 Feb 2021

Keywords

  • Germany
  • skill-biased liberalization
  • varieties of capitalism
  • technological change
  • knowledge economy

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