Reforming the Welfare State: The German Case

Abstract

The Federal Republic of Germany has a long tradition of social policy. Social policy in Germany was restricted to safety regulations for workers until the second half of the last century. However, a milestone in this development was the buildup of a state-organized social security system in the 1880s by Chancellor Bismarck. Health and accident insurance for workers were started in 1883 and in 1884, respectively, whereas pension insurance for workers was installed in 1889. In 1911, pension insurance for employees was added. The public social security system was further extended during the Weimar Republic (1919–1932) and completed by the installation of an unemployment insurance system in 1927 before the start of the Great Depression. Apart from the further extension of safety regulations for workers, several new social policies were added during this time: labor market policy (autonomous and collective wage negotiations, state-run job counseling and placement services, etc.), codetermination rights, public welfare, and housing policy. After the Second World War, the already existing social policies (safety regulations for workers, social security, codetermination rights, public welfare, and housing policy) were not only preserved and enforced, family, education, and redistribution policies were also added.