Abstract
AbstractThe number of long-term unemployed in Germany has stagnated at around one million for several years. Despite excellent labour market conditions, the long-term unemployment rate is well above the OECD average. Therefore, the “carrot and stick” principle of Hartz reforms is in clear need of further development. The author proposes an overall concept for preventing and reducing long-term unemployment and long-term basic income receipt. An important element is an activation strategy for the long-term unemployed and long-term basic income recipients that implies interim target setting and requires more and better trained case managers in the job centres.Jel codes:J31; J38
Highlights
The German labour market has changed drastically over the last ten years
It is true that the Hartz reforms, which are considered internationally as the largest labour market reforms in post-war history, led to a clear decline in the number of unemployed and long-term unemployed people; the interim reports after five and eight years of the Hartz IV reform clearly show that the problem of long-term unemployment and long-term basic income receipt remains unsolved
5.1 Has an activation approach already been implemented in Germany? In 2009, the Federal Employment Agency implemented a four-phase integration model (4PM)
Summary
The German labour market has changed drastically over the last ten years. Just a decade ago there was mass unemployment with roughly five million unemployed people and low employment rates. Germany has been dubbed a job wonderland and European champion with regard to its labour market (see Rinne and Zimmermann 2013 and Dustmann et al 2014). Against this backdrop, it is time to reflect on the further development of the basic income system in Germany. It is true that the Hartz reforms, which are considered internationally as the largest labour market reforms in post-war history, led to a clear decline in the number of unemployed and long-term unemployed people; the interim reports after five and eight years of the Hartz IV reform (see Koch et al 2009 and Dietz et al 2013) clearly show that the problem of long-term unemployment and long-term basic income receipt remains unsolved. One million people have remained unemployed for longer than one year and are considered long-term unemployed. Note that the 2005 Hartz IV reform as a part of the Hartz reforms refers to the merger of unemployment assistance and public assistance to one means-tested and tax-financed basic income scheme which allowed previous public assistance recipients access to active
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