More money for participating and less for opting out – that is the key idea behind the activating social assistance proposal. Developed in 2002 by the Ifo Institute, it has influenced the Hartz Commission and subsequent associated legislation.
The German welfare state is based on the idea of wage replacement, penalising those taking up a job with withdrawal of benefits. Wage replacement, provided through the former unemployment benefits and social assistance, constituted a de facto minimum wage, and as such was a significant factor in turning Germany into the world champion in unemployment among the low-skilled. The Agenda 2010 and the Hartz IV system introduced key reforms that led away from wage replacement, turning instead toward wage support. While headed in the right direction, these reforms did not go far enough. This is where the Ifo Institute’s Activating Social Assistance proposal comes in. In order to further reinforce wage support, the current minimum wage safeguarding system should be replaced by effective safeguarding of minimum income. This reduces both wage demands and wage costs, making it possible for companies to create new jobs.
The elements of the Ifo Institute’s Activating Social Assistance are:
Reform concepts for increasing employment in the low-income sector, ifo Schnelldienst 4/2007 (Special edition, German) (Abstract | Download PDF, 14 MB) Press release, 05 March 2007
Aktivierende Sozialhilfe 2006: Das Kombilohn-Modell des ifo Instituts (PDF, 460 KB) (Activating social welfare 2006 – the Ifo Institute’s Combi-Wage Model) (Preprint, ifo Schnelldienst 2/2006, 21 p., PDF, 460 KB, in German) by Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding Presentation of the Ifo Institute proposal "Activating Social Aid", Bundespressekonferenz, Berlin, 26 January 2006: Ifo Press Release of 26 Jan 2006
Ifo Viewpoint No. 21: Social Welfare Reform Published as "Befreiung aus der Armutsfalle", Wirtschaftswoche, 18 January 2001, p.32.
Ifo Viewpoint No. 6: A New Welfare Concept Munich, 15 November 1999
Notwendige Reformen auf dem Arbeitsmarkt Conference "Arbeitsmarktreformen im Niedriglohnbereich" (28 March 2003 in Frankfurt) and current studies (in German)
Aktivierende Sozialhilfe (Short version of the survey, PDF) published in: Aktivierende Sozialhilfe. Ein Weg zu mehr Beschäftigung und Wachstum, ifo Schnelldienst 9/2002 (Abstract | Download PDF, 2.9 MB)
Eigernordwand, Press article by Hans-Werner Sinn, WirtschaftsWoche, 28 Apr 2005, 146
Social protection in an international comparison OECD study "Wie generös ist Hartz IV im internationalen Vergleich?", published on 18.02.2010
Internationally comparative information on social protection: - Social Policy > Basic Protection > Guaranteeing Sufficient Resources - Labour Market and Migration > Labour Market > Unemplyoment Benefit Systems.
Hans-Werner Sinn, Wolfgang Meister, Wolfgang Ochel, Martin Werding, "Reformkonzepte zur Erhöhung der Beschäftigung im Niedriglohnbereich: Ein Überblick", ifo Schnelldienst 60 (04), S. 3-20 ( Abstract | Download)
Ochel, Wolfgang (with Franz Müntefering, Hermann Otto Solms, Heike Maria Kunstmann, Wilhelm Adamy, Joachim Möller, Peter Hampe, Ulrich Walwei, Michael Knogler, Wolfgang Quaisser, Henry Werner), "Arbeitslosigkeit ohne Ende? Die Arbeitsmarkt- und Beschäftigungspolitik der neuen Bundesregierung in der Kontroverse", ifo Schnelldienst 59 (07), 03-43, 2006
Sinn, H.-W., C. HOlzner, W. Meister, W. Ochel und M. Werding (2006), "Aktivierende Sozialhilfe 2006: Das Kombilohn-Modell des ifo Instituts", ifo Schnelldienst 59 (2), 6-27
Sinn, H.-W., C. Holzner, W. Meister, W. Ochel und M. Werding (2006), Redesigning the Welfare State, Germany´s Current Agenda for an Activating Social Assistance, Edward Elgar, Cheltenham, Northampton, MA.
Meister, Wolfgang and Wolfgang Ochel, "Allowance for Social Security Contributions and Employment in Germany", in: C. Dreger, H.P. Galler and U. Walwei (eds.): Determinants of employment – the macroeconomic view, Nomos, Baden – Baden, 2006, 157–164
Ochel, Wolfgang, "Experiencias en materia de asistencia social para la insercion laboral con programas especificamente destinados al trabajo en primer lugar, en una seleccion de paises", Revista Internacional de Seguridad Social 58 (4), 2005, 75-104
Ochel, Wolfgang, "Welfare-to-Work Experiences with Specific Work-First Programmes in Selected Countries ", International Social Security Review 58 (4), 2005, 67-93
Ochel, Wolfgang, "Hartz IV – Welfare to Work in Germany", CESifo DICE Report 3 (2), 2005, 18-25
Ochel, Wolfgang (with Elke J. Jahn), "Contracting Out Temporary Help Services in Germany", CESifo Working Paper No. 1580, 2005
EEAG 2004 Chapter 2, Labour market reform in Europe, ( Download , PDF)
CESifo Forum 2 / 2004, ( Abstract )
Ochel, Wolfgang, "Competitive Tendering and Contracting of Temporary Work Agencies in Germany", CESifo DICE Report 2 (2), 2004, 69 - 74
Sinn, Hans-Werner, "Migration, Social Standards and Replacement Incomes: How to Protect Low-income Workers in the Industrialized Countries against the Forces of Globalization and Market Integration", CESifo Working Paper No. 1265, 2004 ( Abstract / Download ) Ochel, Wolfgang, "Welfare-to-Work Experiences with Specific Work-First Programmes in Selected Countries", CESifo Working Paper No. 1153, 2004 ( Abstract / Download )
Ochel, Wolfgang (2004), "Beschäftigungsabhängige Steuergutschriften in Großbritannien", ifo Schnelldienst 57 (21), 38-41 ( Abstract )
Ochel, Wolfgang (2004), "Learning from abroad: Chances and limitations of transferring Institutions", CESifo DICE Report 2 (4), 44-53 ( Download )
Sinn, Hans-Werner (2004), Ist Deutschland noch zu retten?, 6. Auflage, ECON-Verlag, München ( Abstract / Informationsseite zum Buch (mit Inhalt, Vorträgen, Reaktionen) )
Sinn, Hans-Werner and Wolfgang Ochel, "Social Union, Convergence and Migration", CESifo Working Paper No. 961, 2003 ( Abstract / Download )
Sinn, Hans-Werner (2003), The New Systems Competition, Yrjö Jahnsson Lectures, Basil Blackwell, Oxford ( Abstract )
Werding, Martin (2003), "After Another Decade of Reform: Do Pension Systems in Europe Converge?", CESifo DICE Report 1 (1), 11-16 ( Download )
Holzner, Christian, Wolfgang Ochel and Martin Werding (2003), Vom OFFENSIV-Gesetz zur "Aktivierenden Sozialhilfe": Ein Konzept zur Reform der Arbeitsmarkt- und Sozialpolitik als Beitrag zu mehr Beschäftigung und Wachstum; Studie im Auftrag der hessischen Staatskanzlei, ifo Forschungsberichte 17, ifo Institut für Wirtschaftsforschung, München ( Abstract )
Sinn, Hans-Werner: "Aktivierende Sozialhilfe", Presentation by Hans-Werner Sinn, COnference "Arbeitsmarktreformen im Niedriglohnbereich", 28.03.2003 (Transparencies: Powerpoint as PDF: Download)
Ochel, Wolfgang, "Welfare to Work in the U.S.: A Model for Germany?", FinanzArchiv 59(1), 2003, 91-119
Ochel, Wolfgang (with Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Martin Werding), Welfare to Work in Germany - A Proposal on How to Promote Employment and Growth, CESifo Research Reports 1, ifo Institut für Wirtschaftsforschung, München , 2003
Sinn, Hans-Werner, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding (2002), "Aktivierende Sozialhilfe - Ein Weg zu mehr Beschäftigung und Wachstum", ifo Schnelldienst 55 (09), 03-52 ( Abstract / Download )
EEAG 2002 Chapter 6, Welfare to Work, ( Download, PDF)
Corsetti, Giancarlo, John Flemming, Seppo Honkapohja, Willi Leibfritz, Gilles Saint-Paul, Hans-Werner Sinn and Xavier Vives (2002), "Welfare to Work", in: EEAG European Economic Advisory Group at CESifo: Report on the European Economy 2002 (CESifo Forum Special), Chapter 6 ( Download, PDF, 950 KB)
Ochel, Wolfgang (2000), "Steuergutschriften und Transfers an Arbeitnehmer im Niedriglohnbereich - der angelsächsische Weg zu mehr Beschäftigung und weniger Armut", ifo Schnelldienst 53 (21), 13-23 ( Abstract )
Sinn, H.-W., W. Leibfritz und A. Weichenrieder (1999), "ifo Vorschlag zur Steuerreform", ifo Schnelldienst 52 (18), 3–18.
Ifo publications and media coverage
A complete list of Ifo Policy Issues
This discussion forum is open to comments on Hans-Werner Sinn’s publications and press statements.
Introduction and current discussion topics
Forum Welfare to Work / Minimum Wage
