Policy Article

The Hartz IV Trap: Disincentives To Work

Authors

  • Alfred Boss
  • Björn Christensen
  • Klaus Schrader
Publication Date

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.

Kiel Institute Expert

Info

Key Words

  • Hartz IV
  • reservation wage
  • wage gap