CAIRN-INT.INFO : International Edition

In ten years, Germany has gone from being the “sick man of Europe” to “economic model”. Indeed, since the mid 2000s, it has been held up as an example for its remarkable performances in terms of economic growth and employment. The sharp drop in unemployment is partly due to the Hartz reforms (2002-2005); which particularly led to more focus being placed on motivating jobseekers. One outcome of this has been increased applications for financial incentives to returning to work and setting up a business. Admittedly, vocational training is still the main active expenditure category, but incentive schemes progressed during the 2000s, building on the trend that began in the late 1990s. We give a rundown of these schemes through a literature review and analysis of Eurostat statistics on the German economy, its labour market and its population’s living conditions. We point out the impacts of back-to-work incentive schemes on employment and their consequences on poverty and inequality.

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