Direct job creation before and after the Hartz reforms

Abstract

"By the beginning of the 21st century, Germany had been facing a situation of high and persistent unemployment for more than a decade with an increasing number of long-term unemployed people. As the situation had been similar in other countries, the OECD (1994) and the European Commission (1997, 1999) had advised their member states in the 1990s to implement reforms towards employment-friendly social protection systems to increase employment for a sustainable welfare state. Therefore, Germany implemented major reforms (the so-called Hartz reforms) in the early 2000s. The reforms meant a considerable change in the unemployment benefit system and put a strong focus on the activation of a broad group of unemployed people that had not been necessarily active in the labor market or registered as unemployed before. One activation scheme, particularly for individuals with severe difficulties of finding a job, is direct job creation (DJC). It provides unemployed individuals with 'temporary work and, in some cases, regular jobs in the public sector or in non-profit organizations' (OECD, 2001). Inflow into DJC was particularly high in the years after the Hartz reforms." (Text excerpt, IAB-Doku) ((en))

Cite article

Hohmeyer, K. (2014): Direct job creation before and after the Hartz reforms. In: Y. Kilsang (Hrsg.) (2014): Active labour market policies in OECD countries, p. 51-66.