In January 2005, the German government enacted a substantial reform of the welfare system, the so-called “Hartz IV reform”. This book evaluates key characteristics of the reform from a microeconometric perspective. It investigates whether a centralized or decentralized organization of welfare administration is more successful to integrate welfare recipients into employment. Moreover, it analyzes the employment effects of an intensified use of benefit sanctions and evaluates the effectiveness and efficiency of the most frequently assigned Active Labor Market Programs. The analyses have a focus on immigrants, who are highly over-represented in the German welfare system.
Seminar paper from the year 2005 in the subject Sociology - Politics, Majorities, Minorities, grade: A, University of Dalarna (Political Sociology), course: Restructuring the Welfare State, language: English, abstract: As health care is among the most personal issues, this is one reason why it is also among the most politically discussed as cost containment has become a priority of health care policy. Health care has consumed a large and growing portion of social spending in all advanced industrialised societies, particularly in the last decade. This cost explosion coincided with the global economic slowdown and worries about the fiscal viability of the welfare state. Reasons for escalating health care costs are, although to varying degrees, common to Western countries. The health care sector provides fertile ground for technological innovations that may prolong life but at considerable expense. Moreover, once these discoveries are made, it is extremely difficult for insurers or governments to limit their provision, as patients demand access to these treatments. Furthermore, the aging population of Western countries has direct consequences for health care because older persons are more likely to be in need of cost intensive treatment and/or care due to acute illness or chronic conditions. At the same time, birth rates are no longer balanced with increasing longevity, so that there will be fewer working age persons in the future to bear the financial requirements for elderly care. Governments and employers claimed that health care costs posed immediate and longterm problems and began to search for ways to address them. The ‘new politics of the welfare state’ – Pierson’s (1996) famous concept, which deals with welfare state reform in the face of changing demographic and tougher economic conditions – has also modified the position of diverse welfare state stakeholders. The actions and preferences of payers and the state are determined by the prevailing health care system as well as by the political system and whether it provides them an opportunity to influence health policies.
One of the fundamental challenges facing modern welfare states is the question of work-family reconciliation. An increasing share of mothers work, but many European welfare states do not adequately support the dual-earner model, especially in southern Europe. After 2005, German policy-makers transformed the nature of Germany’s family policy regime through a number of legislative measures, whilst Italy, a country with many similarities, witnessed little change. Using a multi-methods approach, this book addresses the puzzle of why Germany was able to implement far-reaching reforms in this policy area after a long impasse and Italy was not. As such, it delivers a broad, systematic account of these reforms and sheds light on why similar reforms were not also adopted in other similar welfare states at the same time. More generally, it contributes to understanding the determinants of welfare policy change in modern European welfare states. This text will be of key interest to scholars, students and professionals working on topics linked to European politics, welfare and work-family policies, comparative politics, social policy, and more broadly to political science and gender studies.
Thesis (M.A.) from the year 2005 in the subject Politics - Political Systems - Germany, grade: sehr gut, London School of Economics, language: English, abstract: Economic globalisation seems to have intensified the claims that an extensive national welfare state is no longer sustainable under high exposure to global competition. However, the evidence for significant welfare dismantlement in Germany is missing. In this dissertation, I endeavour to analyse, why globalisation does not seem to have had any significant impact on the German welfare state in terms of serious downwards reform. I contend that the actual impact of economic globalisation on the national welfare state depends a great deal, on how it is interpreted domestically. Hence, I would like to regard the impact of globalisation not only as an exogenous force, but also as a result of what national policy makers, media, electorate, etc. interpret it to entail. In other words, although globalisation really seems to strain existing welfare structures, policy makers still have a considerable scope how to react to these pressures. For my endeavour, I introduce a historical institutionalist framework of path-dependency, which I confront with a social constructivist framework. Prima facie, the path-dependency theorem seems to hold for the German welfare state. However, I claim that a social constructivist angle is able to illuminate how the institutional constraints propagated by the path-dependency thesis can be overcome. Institutional constraints continue to impede welfare reform in German only because the German political elite failed to socially construct the imperative of reform in public discourse, leaving the great majority of the German population unwilling to accept fundamental cutbacks in social benefits. I argue that the Schröder administration attempted to legitimise cutbacks in social services through referring to exogenous pressures of globalisation. In addition, the media discusses the increased need for welfare state reform in the context of globalisation. Although, there seems to be a trend of mounting acceptance of welfare reform among the German population, the general level for support of such measures remains low. I attempt to show that the notion of globalisation on its own appears unable socially construct the public acceptance of serious welfare state reform. Hence, the most likely scenario for the near future of the German welfare state seems the absence of reform until the prolonged economic crisis legitimises significant transformations of the current system.
A prominent economist argues in this German bestseller that Germany can rescue its sluggish economy by transforming its social welfare system and reforming its labor market and tax structure, offering insights into economic dilemmas experienced by all advanced economies in a time of globalization. What has happened to the German economic miracle? Rebuilding from the rubble and ruin of two world wars, Germany in the second half of the twentieth century recaptured its economic strength. High-quality German-made products ranging from precision tools to automobiles again conquered world markets, and the country experienced stratospheric growth and virtually full employment. Germany (or West Germany, until 1989) returned to its position as the economic powerhouse of Europe and became the world's third-largest economy after the United States and Japan. But, in recent years, growth has slowed, unemployment has soared, and the economic unification of eastern and western Germany has been mishandled. Europe's largest economy is now outperformed by many of its European neighbors in per capita terms. In Can Germany Be Saved?, Hans-Werner Sinn, one of Germany's leading economists, takes a frank look at his country's economic problems and proposes welfare- and tax-reform measures aimed at returning Germany to its former vigor and vitality. Germany invented the welfare state in the 1880s when Bismarck introduced government-funded health insurance, disability insurance, and pensions; the German system became a model for other industrialized countries. But, Sinn argues, today's German welfare state has incurred immense fiscal costs and destroyed economic incentives. Unemployment has become so lucrative that the private sector, already under pressure from international low-wage competitors, has increasing difficulties in paying sufficiently attractive wages. Sinn traces many of his country's economic problems to an increasingly intractable conflict between Germany's welfare state and the forces of globalization. Can Germany Be Saved? (an updated English-language version of a German bestseller) asks the hard questions - about unions, welfare payments, tax rates, the aging population, and immigration - that all advanced economies need to ask.Its answers, and its call for a radical rethinking of the welfare state, should stir debate and discussion everywhere.
In 2005 the German government implemented the so-called Hartz IV reform, which amounted to a complete overhaul of the German unemployment insurance system and resulted in a significant reduction in unemployment benefits for the long-term unemployed. In this paper, we use an incomplete-market model with search unemployment to evaluate the macro-economic and welfare effects of the Hartz IV reform. We calibrate the model economy to German data before the reform and then use the calibrated model economy to simulate the effects of Hartz IV. In our baseline calibration, we find that the reform has reduced the long-run (noncyclical) unemployment rate in Germany by 1.4 percentage points. We also find that the welfare of employed households increases, but the welfare of unemployed households decreases even with moderate degree of risk aversion.
The author of this study argues that key politicians and their policy ideas, through "ideational leadership," have played an important role in the passing of structural reforms in the change-resistant German welfare state.
This volume presents a thought provoking analysis of key welfare state issues engaging policy makers across the globe. It provides a unique and comprehensive evaluation of the state of welfare states- developed and developing. It maps the diversity of welfare regimes across the world and brings to fore the particularities and nuances that characterise them. The book also focuses on the on-going reforms and makes a powerful case for the increased relevance of the welfare state in a globalizing era.
The new welfare settlement in Europe involves a re-direction of policy in the context of a unified market and currency system and of more stringent economic competition. Realignment of the policy assumptions and goals of the key actors is central to this process. This book reviews the main policy paradigms and analyzes the processes whereby they have changed in the most salient policy areas, and is based on recent interviews with more than two hundred and fifty senior policy actors in seven West European countries.
