IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/5458.html
   My bibliography  Save this paper

Basic Income Reform in Germany: Better Gradualism than Cold Turkey

Author

Listed:
  • Spermann, Alexander

Abstract

This paper advocates the cautious and constitutional evolution of existing basic income schemes (?unemployment benefit II?) and Targeted Negative Income Tax (TNIT = "Einstiegsgeld") into a means-tested combi-wage model for the future long-term unemployed (gradualism strategy). The paper argues that, with regard to existing unemployment benefit II claimants, stronger financial incentives should be offered on a time restricted basis by largely disregarding (up to the relative poverty line) earnings from "mini", "midi" and part-time jobs – with the aim of providing current unemployment II claimants with a powerful incentive to work at least 15 hours a week and thus to relinquish their unemployed status. Bearing in mind the uncertain employment impact and the related fiscal risks, the paper advises against additional financial incentives by reducing support levels from one day to the next (cold turkey strategy).

Suggested Citation

  • Spermann, Alexander, 2006. "Basic Income Reform in Germany: Better Gradualism than Cold Turkey," ZEW Discussion Papers 06-064, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5458
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/24519/1/dp06064.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Spermann, Alexander & Strotmann, Harald, 2005. "The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment," ZEW Discussion Papers 05-68, ZEW - Leibniz Centre for European Economic Research.
    2. Koch, Susanne & Stephan, Gesine & Walwei, Ulrich, 2005. "Workfare: Möglichkeiten und Grenzen," IAB-Discussion Paper 200517, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Viktor Steiner & Katharina Wrohlich, 2004. "Work Incentives and Labor Supply Effects of the 'Mini-Jobs Reform' in Germany," Discussion Papers of DIW Berlin 438, DIW Berlin, German Institute for Economic Research.
    4. Hans-Werner Sinn & Christian Holzner & Wolfgang Meister & Wolfgang Ochel & Martin Werding, 2006. "Activating social welfare 2006 - the combi-wage model of the Ifo Institute," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(02), pages 06-27, January.
    5. Hans-Werner Sinn & Christian Holzner & Wolfgang Meister & Wolfgang Ochel & Martin Werding, 2002. "Active Welfare - A path to higher employment and growth," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 55(09), pages 03-52, May.
    6. Michalopoulos, Charles & Robins, Philip K. & Card, David, 2005. "When financial work incentives pay for themselves: evidence from a randomized social experiment for welfare recipients," Journal of Public Economics, Elsevier, vol. 89(1), pages 5-29, January.
    7. Dietz, Martin & Koch, Susanne & Walwei, Ulrich, 2006. "Kombilohn: Ein Ansatz mit Haken und Ösen," IAB-Kurzbericht 200603, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Stefan Boeters & Nicole Gürtzgen & Reinhold Schnabel, 2006. "Reforming Social Welfare in Germany: An Applied General Equilibrium Analysis," German Economic Review, Verein für Socialpolitik, vol. 7(4), pages 363-388, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giamattei, Marcus, 2015. "Cold Turkey vs. Gradualism - Evidence on Disinflation Strategies from a Laboratory Experiment," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-67-15, University of Passau, Faculty of Business and Economics.
    2. Marcus Giamattei, 2022. "Can Cold Turkey Reduce Inflation Inertia? Evidence on Disinflation and Level‐k Thinking from a Laboratory Experiment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2477-2517, December.
    3. Jochen Michaelis & Alexander Spermann, 2009. "Geringqualifizierte Arbeit, Marktlöhne und Sozialpolitik: Konzepte für Deutschland," MAGKS Papers on Economics 200920, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    4. Genz, Hermann & Spermann, Alexander, 2007. "Das Mannheimer Grundsicherungsmodell - der Weg zu einer effizienteren und gerechteren Grundsicherung ohne Absenkung des Arbeitslosengeld II-Niveaus," ZEW Discussion Papers 07-002, ZEW - Leibniz Centre for European Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oskamp, Frank & Snower, Dennis J., 2006. "The effect of low-wage subsidies on skills and employment," Kiel Working Papers 1292, Kiel Institute for the World Economy (IfW Kiel).
    2. Jirjahn, Uwe & Pfeifer, Christian & Tsertsvadze, Georgi, 2006. "Mikroökonomische Beschäftigungseffekte des Hamburger Modells zur Beschäftigungsförderung," IAB-Discussion Paper 200625, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Müller, Kai-Uwe & Steiner, Viktor, 2011. "Beschäftigungswirkungen von Lohnsubventionen und Mindestlöhnen - Zur Reform des Niedriglohnsektors in Deutschland," Discussion Papers 2011/4, Free University Berlin, School of Business & Economics.
    4. Joachim Ragnitz & Marcel Thum, 2008. "Beschäftigungswirkungen von Mindestlöhnen : eine Erläuterung zu den Berechnungen des ifo-Instituts ; Wiederabdruck aus ifo-Schnelldienst Nr. 1/2008, 16-20," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(06), pages 62-66, March.
    5. Maximilian Joseph Blömer & Clemens Fuest & Andreas Peichl, 2019. "Out of the low-income trap(!) – The ifo proposal for reforming the basic income support system," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(04), pages 34-43, February.
    6. Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (ed.), 2006. "Arbeitslosengeld II reformieren: Ein zielgerichtetes Kombilohnmodell. Expertise im Auftrag des Bundesministers für Wirtschaft und Technologie," Occasional Reports / Expertisen, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, number 75364, April.
    7. Andreas Knabe & Ronnie Schöb & Joachim Weimann, 2006. "Marginal Employment Subsidization: A New Concept and a Reappraisal," Kyklos, Wiley Blackwell, vol. 59(4), pages 557-577, November.
    8. Tim Lohse, 2006. "Zum optimalen Verhältnis von Sozialhilfe und Arbeitslosengeld II [zwei] : Themenschwerpunkt Arbeitslosengeld II [zwei]," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 16-19, 04.
    9. Philip Jung & Anke Hassel & Robert Habeck & Matthias Knuth & Alexander Spermann & Hans Peter Grüner & Maximilian Joseph Blömer & Clemens Fuest & Andreas Peichl, 2019. "Proposed labor market reforms: Is Hartz IV still sustainable?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(06), pages 03-25, March.
    10. Peter Haan & Viktor Steiner, 2007. "Mehr Beschäftigung durch Subventionierung der Sozialbeiträge? Eine empirische Evaluation aktueller Reformvorschläge," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(4), pages 378-388, November.
    11. Baumann, Alexendra & Wohlrabe, Klaus, 2019. "Publikationen von Wirtschaftsforschungsinstituten im deutschsprachigen Raum - Eine bibliometrische Analyse [Publications of Economic Research Insitutes in the German Speaking Area - A bibliometric ," MPRA Paper 92240, University Library of Munich, Germany.
    12. Peichl, Andreas, 2005. "Die Evaluation von Steuerreformen durch Simulationsmodelle," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 05-1, University of Cologne, FiFo Institute for Public Economics.
    13. Jochen Michaelis & Alexander Spermann, 2009. "Geringqualifizierte Arbeit, Marktlöhne und Sozialpolitik: Konzepte für Deutschland," MAGKS Papers on Economics 200920, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    14. Stefan Boeters & Michael Feil & Nicole Gürtzgen, 2007. "Discrete Working Time Choice in an Applied General Equilibrium Model," Computational Economics, Springer;Society for Computational Economics, vol. 29(3), pages 427-427, May.
    15. Krimmer, Pascal & Raffelhüschen, Bernd, 2007. "Grundsicherung in Deutschland: Analyse und Reformbedarf," FZG Discussion Papers 14, University of Freiburg, Research Center for Generational Contracts (FZG).
    16. Joachim Ragnitz & Marcel Thum, 2008. "Employment effects of minimum wages - an explanation of calculations presented by the Ifo Institute," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(01), pages 16-20, January.
    17. Heblich, Stephan, 2007. "Eigenverantwortliche Individuen und Pro-Aktive Unternehmen," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-48-07, University of Passau, Faculty of Business and Economics.
    18. Spermann, Alexander & Strotmann, Harald, 2005. "The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment," ZEW Discussion Papers 05-68, ZEW - Leibniz Centre for European Economic Research.
    19. Stefan Bauernschuster & Wido Geis & Christian Holzner & Helmut Rainer, 2010. "The German Federal Constitutional Court's ruling on the Hartz-IV standard rates: background and significance," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(05), pages 21-29, March.
    20. Schupp, Claudia & Wache, Benjamin, 2014. "Wie groß ist der Einfluss von deutschen Wirtschaftsforschungsinstituten? Ein Ranking anhand von RePEc-Daten [How large is the influence of German economic research institutes? A ranking analysis us," MPRA Paper 55519, University Library of Munich, Germany.

    More about this item

    Keywords

    Labor Market Reform; Employee Subsidy; Workfare; longterm unemployment;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:5458. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.