Policy Article
The Hartz IV Trap: Disincentives To Work
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Welfare State
Labor Market
Germany
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.
