Policy Article

The Hartz IV Trap: Disincentives To Work

In Germany many recipients of benefits for the long-term unemployed (“Arbeitslosengeld II”) have little incentive to seek full-time work in the first labor market. The difference between these benefits and the wage they would earn on a job make working not worth it for them. This is especially the case for low-qualified sole wage earners in families with children.

Authors

Alfred Boss
Björn Christensen