Which factors were behind Germany's labour market upswing? A data?driven approach*

Germany has experienced a strong and sustained labour market upswing since the mid-2000s. While various studies have highlighted different specific reasons for this development, study contributes to debate by simultaneously considering broad set of candidate factors in unified methodological framework systematically weighing them against each other on an empirical basis. We develop structural macroeconometric that leaves as many systematic interlinkages possible determination while operating with minimal restrictions order identify economically meaningful shocks. For purpose, we combine short- long-run based established assumptions force technological change, search matching market. Matching efficiency, intensity job creation, growing force, declining propensity separate explain most German upswing.