Advancement by entering the labour market
The Hartz reforms of 2003 to 2005 are among the most far-reaching labour market reforms in recent German history. On the one hand, critics criticise the negative consequences of a large low-wage sector by European standards, in particular the fact that many workers remain in low-paid employment. On the other hand, supporters of the Hartz reforms see this as confirmation of successful activation policies.
Under the direction of DIW Econ Senior Research Associate Prof Dr Timm Bönke, DIW Econ is examining the impact of the activation policy aspects of the Hartz reforms on behalf of the Konrad Adenauer Foundation. Using data from the German Socio-Economic Panel (SOEP) and the Labour Market and Social Security Panel (PASS), they conducted extensive analyses of thousands of unemployment biographies of people who have managed to enter the labour market since the 2005 labour market reforms.
It shows that the promise of advancement by starting work is fulfilled. Any form of employment – even if it is linked to the receipt of benefits – improves the chances of former benefit claimants to establish themselves in the labour market.
Those who “top-up” have almost two and a half times more chances of independence and adequate work. However, not everyone is equally successful in taking up employment subject to social insurance contributions without receiving benefits. Single parents and older workers in particular, but also people with a long experience of unemployment, have only limited success in this social advancement.
Further information and discussions can be found in the complete study that DIW Econ has produced for the Konrad Adenauer Foundation.
Link to study (1,55 MB)