The analysis is about the compulsory German unemployment insurance system (GUIS). It is known that GUIS has done nothing to prevent the continuous rise of the rate of unemployment since the 1970s. The empirical literature about GUIS indicates that the few endeavours to increase incentives to work have been intramarginal. Concomitant to the failing GUIS a body of literature on reforming the system of unemployment insurance has arisen, most of it aiming at marginal reforms only. It turns out that theoretical problems of insurability are considered to be the main obstacles of a sweeping change.