Hartz IV - Reform of a controversial political measure

Abstract

"Hartz IV has been in force since 2005. The law has combined unemployment benefits and social assistance. Since it came into force, unemployment has fallen significantly. Whether this was mainly due to the Hartz IV reform or other causes were responsible for the positive development remains controversial. The number of people in need of assistance has hardly decreased and the working poor has increased significantly since 2004. This development suggests that the benefits of the Social Code II (SGB II) do not partially benefit the originally-targeted group of people and that some credits and sanctions were not always proportionate and incentive-compatible with different affected groups, e.g. with regard to the employed beneficiaries. Various changes have therefore been proposed: assets should be credited according to less stringent criteria and additional earnings should be credited at a lower percentage rate; the employment biography should be taken into account and thus preference should be given to long-term employees; alternatives to the Social Code II should be strengthened, for example by increasing the basic tax allowance and better coordination with the overall tax transfer system." (Author's abstract, © Springer-Verlag) ((en))

Cite article

Walwei, U., Eichhorst, W., Rinne, U., Blömer, M., Fuest, C., Peichl, A., Schupp, J. & Becker, G. (2019): Hartz IV - Reform einer umstrittenen politischen Maßnahme. Zeitgespräch. In: Wirtschaftsdienst, Vol. 99, No. 4, p. 235-255. DOI:10.1007/s10273-019-2439-3