Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany



12


Lena Jacobi and Jochen Kluve

3. (b) Activation of Jobseekers

The principle of “rights and duties” is the core element of the Hartz reforms.
The activation strategy is implemented in virtually every element of the
labour market policy framework, e.g. in the
benefit system: Whereas before the
reform previous social security contribution was the key criteria for benefit
access, now the access to benefits and active labour market participation is
strictly conditional on a person’s ability to work. This is defined as being able
to work at least 15 hours a week. Those capable of working are assigned to the
employment agencies and will be subject to activation policies on the basis of
the principle of “rights and duties”. An unemployed person receives a so-
called benefit type I for the first 6 to 12 months of unemployment. Thereafter,
the person receives a lump sum means-tested benefit type II. Persons who
never made contribution payments but who are deemed capable of working
will receive the benefit type II right from the beginning. The benefit type II is
not earnings-based, as the unemployment assistance benefit had been in the
previous system, and is less generous than social assistance. Only those who
are not capable of working due to sickness, disability or care responsibilities
receive means-tested social assistance from the local authorities and are ex-
empted from “duties”.

The reform also introduced sanction elements, i.e. additional means to effec-
tively monitor the jobseeker’s job search activities and personal efforts to
re-integrate into the labour market. The jobseeker is obliged to accept any
offer of suitable work. The definition of suitable work was broadened, e.g. in-
cluding the obligation to move to a different city under certain circumstances.
Benefit receipt is strictly conditional on the availability for work and the avail-
ability for programme participation. The individual action plan that results
from the profiling process is set out in a binding integration agreement
(
Eingliederungsvereinbarung). This written agreement states both the services
that will be provided to the job seeker as well as the job seeker’s obligation re-
garding job search activities and programme participation, where required.
An unemployed individual will be threatened by sanctions if he or she de-
viates from the integration agreement or does not cooperate appropriately.
Though possible in principle, sanctions in the form of temporary benefit re-
ductions are rarely applied in practice, since they used to provoke costly
lawsuits with benefit claimants. A person’s availability can additionally be
tested by training or by workfare measures in the public sector (the so-called
1-EURO-Jobs) or assignment to PSA.

The new policy mix is more strongly orientated towards measures for
jobseekers who proactively seek to improve their situation in a self-re-
sponsible way. There is more emphasis on measures that promote the direct
integration into the labour market as opposed to training measures and public
job creation schemes that keep participants out of the market for the duration



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