When the centre-left government came into power in Germany in 1998, a core promise of the new Chancellor, Schroeder, was to reduce the lack of jobs and to increase welfare. Facing persistently increasing unemployment rates from then on, the government finally launched “Hartz IV” in 2004; the...

Until 2004, German long-term unemployed received a tax-financed benefit (Arbeitslosenhilfe)which exceeded social assistance for the disabled (Sozialhilfe). This has beenchanged by the recent reform known as “Hartz IV”: Effective from 2005, long-termunemployed on the one hand (who are no more...