Lower or the Same Benefits Enable Faster Job Change in Germany
The amount and duration of benefits for short-time work and unemployment in Germany should be reduced or at least not increased any further. That is what the ifo Institute writes in a brief assessment for the Chamber of Industry and Commerce for Munich and Upper Bavaria. First and foremost, the experts see a reduction in the maximum period of entitlement to a short-time work allowance from the current 24 months to 12 or six months. This would give employees who are affected by structural change in their sector more incentive to change jobs quickly. The ifo Institute also advocates cuts, or at least a freeze, in the amount of support paid as citizen’s benefit (Bürgergeld; basic income support). “Higher benefits and longer periods hamper those affected in their search for new employment,” says ifo expert Volker Meier.
The ifo experts base their assessment on recent studies that have shown that higher or longer benefits extend the time spent in short-time work and unemployment. They also point out that switching from unemployment benefit II (Arbeitslosengeld II) to citizen’s benefit has led to a considerable expansion of benefits. According to the ifo experts, however, it would be necessary to enable those affected to retrain or upskill in order to exploit this potential. In their opinion, accelerated training programs for career changers could help avoid or at least shorten unemployment.
