Abstract
Nine years ago, Germany has implemented Hartz IV, the last one in a series of welfare state reforms, merging the former separate systems of long term unemployment benefit and basic income support into a new system. The article summarizes the main empirical findings from a growing field and draws a few conclusions. Mainly, after years of heavy debates and practical experiences in Germany and elsewhere, it has to be said the goal of substantially reducing poverty and saving public money has not really been achieved. Although the system is working well in terms of financial support and population coverage, there are problems in providing cultural and social participation, and even the money is not enough under certain family constellations. Moreover, the idea to solve every poverty problem by rigid work first policies does obviously conflict with the observable heterogeneity of poverty situations. Main results are the disappearance of the privileges of persons in long term unemployment, a shift from permanent unemployment to unsteady low wage employment and need for further subsidies for a major part of the poor, as well as a consolidation of the normative image of a ‘normal working citizen’, making it harder to get support for people who don’t fit into that scheme.
Highlights
RESUMEN Hace nueve años, Alemania puso en marcha Hartz IV, la última de una serie de reformas del estado social, fusionando en un nuevo y único sistema las antes separadas prestacciones por desempleo de larga duracción y los apoyos a los ingresos
One of the most remarkable findings in the field of population dynamics and the first unexpected consequence for policy makers were the unexpectedly high numbers of claimants in early 2005 (Rudolph 2006). The former two systems – basic income support and long term unemployment benefit - had had included 3.92 Mio persons at the end of 2004, of which about 1 Mio were estimated to be transferred into other systems like sick benefit, early retirement or pension, to change into employment or to lose their entitlements due to stricter access rules compared to the former system for long term unemployed
Coming back to the unemployed in the Hartz IV system: Vocational or professional identities rooted in vocational training during adulthood seem to stabilize the self-perception, self-effectiveness, labouring capacity and employability even through long periods of unemployment (Hirseland 2010), while non-participation in labour again evokes the destructuring powers on everyday life, family and social relations we all know from the classical poverty studies like those by Booth (1892-97), Rowntree (1902), or Jahoda et al (1974)
Summary
Since the mid 1990s, many European countries have debated and implemented welfare reforms inspired by the idea of ’activation’. Saalebey 1996, Lee 1994 9 There have been huge international debates on the ‘culture of poverty’ thesis (for an overview see Barlösius/Ludwig-Mayerhofer 2001) as well as lots of research and publications on the poverty trap, which proved the rationality of many behavioural patterns in poverty (Jordan et al 1992), the relatively high entry- and exit-dynamics of the poverty population (Bane/Elwood 1986, Leibfried/Leisering 1995, Buhr 2011) as well as the causes for entering poverty being exogenous to the persons’ economic behavior – like general labour market problems, socioeconomic change (Vobruba et al 2002), illness and psychosocial crises (Chowdhury 2001, Senadjiki et al 2012) and – for Germany – the fact that sinking real wages (Joebges et al 2009) contributed more to narrowing the wageswelfare-gap than the presupposedly rising welfare benefits, which did not rise after all when controlled for consumer price developments. The following section will show main results of all those four research lines
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