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Title:The welfare state evolves: German Knappschaften, 1854 - 1923 PDF Logo
Authors:Jopp, Tobias Alexander
Issue Date:2010
Series/Report no.:FZID discussion papers 16-2010
Abstract:This paper reviews the German miners' model of mutual insurance from its introduction in 1854 to its basic reformation in 1923. Its core feature was the provision of cash benefits for compensation of income losses due to temporary sickness and permanent invalidity or death of the bread-winner. The carriers of the insurance scheme, the Knappschaften, date back to medieval times, and the Knappschaft is still present today as the second pillar of the German statutory old-age insurance. This paper aims to establish the Knappschaft insurance's main characteristics in the period under consideration. These include, for example, compulsory membership, shared financing between employed miners and entrepreneurs, selfmanagement, financing based on earnings-related social insurance contributions, a strong emphasis of the insurance principle, and application of the pay-as-you-go mechanism. The organisational analysis is complemented quantitatively, on the one hand, by evidence on increasing generosity and, on the other hand, evidence on increasing financial distress substantiating the shadow side of a maturing pay-as-you-go based scheme. In particular, Knappschaften experienced all trends we commonly associate with today's systems in the second half of the 20th century as early as in the 19th century, even before the Bismarckian insurance was installed from 1883 on: Increasing social security spending, rising pensioners-tocontributors ratios, concentration and pressure on finances forcing Knappschaften to adjust their fiscal policy according to the mechanics of pay-as-you-go.
social security
welfare state
Persistent Identifier of the first edition:urn:nbn:de:bsz:100-opus-4761
Document Type:Working Paper
Appears in Collections:FZID Discussion Papers, Universität Hohenheim

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