Combining social assistance and earned income in Germany : legal alternatives and their labour market effects

Abstract

"In September 2009, almost 1.4 million workers received supplementary social assistance to raise their earned income to the subsistence level defined by the second book of the German Social Code (SGB II). The persistently high number of working poor ignited an ongoing political debate. That debate has focused on whether a change in the legislation for combining social assistance and earned income according to the SGB II could increase incentives to take up full-time work. This article analyses the labour supply and fiscal effects of a wide array of policy variations using the IAB microsimulation model. The labour supply effects of the examined reforms turn out to be rather low. This result corroborates the view that the heterogeneous problems of the working poor cannot be metwith a reform of rules that would result in a reduction of benefits alone. Above all, integrated approaches are required that focus on the specific barriers faced by the working poor." (Author's abstract, IAB-Doku) ((en))

Cite article

Dietz, M., Koch, S., Rudolph, H., Walwei, U. & Wiemers, J. (2011): Reform der Hinzuverdienstregeln im SGB II. Fiskalische Effekte und Arbeitsmarktwirkungen. In: Sozialer Fortschritt, Vol. 60, No. 1/2, p. 4-15. DOI:10.3790/sfo.60.1-2.4