The study examined the future approach to social-welfare burden sharing in Rhineland-Palatinate. The study showed that a system oriented towards the actual additional spending of the municipalities lacks the proper incentives and is thus not advisable. A future approach should be based on indicators that cannot be changed by the local authorities, such as unemployment, long-term joblessness, population density, percentage of retired and disabled citizens. Studies based on these indicators show that this would lead to strong redistribution. An approach to social-welfare burden sharing based on these indicators could be of interest to other Länder without a social-welfare burden sharing or one based on expenditures.
ifo Forschungsberichte No. 11, Munich, July 2002.
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