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According to Florian Gerster, head of the Federal Employment Services (Bundesanstalt für Arbeit), high labor costs are the main cause of ever-increasing unemployment in Germany. This is why Germany, compared to other countries, fails to create jobs even in times of economic growth. Gerster regards the reduction of labor costs as the central issue of German labor market reform.
Florian Gerster was the first guest of the new IZA Tower Talk event series, which takes place in the new "Post Tower" of Deutsche Post World Net - a venue that symbolizes the forward-looking, dynamic economic environment of the Bonn metro area.
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In front of 200 invited guests, Gerster explained the future reform steps of the German job centers. The new structure of the Federal Employment Services is expected to be in place by the end of 2004. According to Gerster, more efficient job placement and more effective labor market policies will help reduce unemployment over the medium term.
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