Building on the Ifo proposal for a welfare-to-work oriented reform of the current social assistance programme, the state-level government of Hessen took the initiative of drafting a new law on income support for individuals seeking employment that was fed into federal-level decision making in 2003. The Ifo Institute supported these activities through advise on the general structure of a new social assistance scheme and estimations regarding the fiscal effects of different designs for this scheme during all the stages of the decision making process, until a final agreement was reached between the federal-level parliament (Bundestag) and state representatives (Bundesrat), which fell short of what Ifo had actually suggested.
Christian Holzner, Wolfgang Ochel and Martin Werding, "Vom OFFENSIV-Gesetz zur "Aktivierenden Sozialhilfe" - Ein Konzept zur Reform der Arbeitsmarkt- und Sozialpolitik als Beitrag zu mehr Beschäftigung und Wachstum", ifo Forschungsbericht Nr. 17, Munich 2003.
Literature to the low wage sector concept of the Ifo Institute [Link]
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