Regional development of employed persons receiving Unemployment Benefit II in Germany. An analysis of convergence across federal states

Stefan Schneck and André Pahnke

Economics and Business Letters, 2013, vol. 2, issue 4, 182-189

Abstract: As a result of the last major reform of the German social security system, not only long-term unemployed but also employed persons are entitled to a new benefit – called Unemployment Benefit II – if the total income is below a legally binding subsistence level. For a few years, almost every third employable recipient of this means-tested benefit has actually been an employed person. Adding a regional analysis of recent developments to the existing literature, this paper concludes that German federal states generally drift apart regarding employed recipients of Unemployment Benefit II. One possible explanation is a potentially higher social acceptance of low paid jobs in federal states with higher shares of employed persons receiving Unemployment Benefit II.

Date: 2013
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