[Journal:] Zeitschrift für ArbeitsmarktForschung – Journal for Labour Market Research [ISSN:] 2510-5027 [Volume:] 38 [Year:] 2005 [Issue:] 2/3 [Pages:] 383-395
In the context of the so-called Hartz reforms, the previous unemployment assistance and the social assistance for individuals who are in need but capable of work were combined into a uniform basic benefit for those seeking employment. After a brief description of the problems associated with the old institutions, the regulations of the new unemployment benefit II are outlined. Then the effects of the reform are analysed. As the new system was introduced only recently, it is not yet possible to examine the actual effects empirically. The impact analysis can only be geared towards the theoretically expected effects. For this a partial analytical labour market model is used. It is shown that the incentives for suppliers of labour have been increased only slightly and that a conversion of the increase in supply into additional employment is uncertain. Positive employment effects are expected in the medium term if wage disparity is increased at the lower end of the range and complementary ways of promoting employment are used.