Policy Article

The Hartz IV Trap: Disincentives To Work


  • Boss
  • A.
  • Christensen
  • B.
  • Schrader
  • K.
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


Key Words

  • Hartz IV
  • reservation wage
  • wage gap