Social Security Reforms in Germany Ulrich Becker Financial Crisis and Social Security Reforms in Germany Moscow, Higher School of Economics, March 2017

Financial Crisis and Labour Market Ulrich Becker Introduction Financial Crisis and Labour Market Social Policy Reactions to the Financial Crisis Social Law Reforms before the Financial Crisis Evaluation and Outlook

Financial Crisis and Labour Market Correlations Ulrich Becker Financial Crisis and Labour Market Correlations

Financial Crisis and Labour Market Unemployment Rates Ulrich Becker Financial Crisis and Labour Market Unemployment Rates

Financial Crisis and Labour Market Ulrich Becker Financial Crisis and Labour Market

Social Policy Reactions General Remarks Ulrich Becker Social Policy Reactions General Remarks no changes regarding employment protection (dismissals) no changes regarding collective agreements

Social Policy Reactions Social Insurance Ulrich Becker Social Policy Reactions Social Insurance Reduction of SHI contributions Back to the level before the crisis (as in 2008) Indivdual complementary contribution (‚Kassenindividueller Zusatzbeitrag‘)

Social Policy Reactions Ulrich Becker Social Policy Reactions

Social Policy Reactions Social Insurance Ulrich Becker Social Policy Reactions Social Insurance Reform of short-time working benefit Conditions: regular individual working time shorted for more than 10 % as a consequence of economic causes or an unavoidable event shortage for a limited period of time (not permanent!)

Social Policy Reactions Social Insurance Ulrich Becker Social Policy Reactions Social Insurance Reform of short-time working benefit Calculation: Regular working hours net wage differential Shortage due to crisis Benefit: 60 or 67 %

Social Policy Reactions Social Insurance Ulrich Becker Social Policy Reactions Social Insurance Reform of short-time working benefit Lengthening of benefit duration Simplification of the conditions (prerequisits) Reimbursement of social insurance contributions

Development of short-time work: workers (Source BA) Ulrich Becker Development of short-time work: workers (Source BA)

Development of short-time work: Workers and Firms Ulrich Becker Development of short-time work: Workers and Firms

Pre-Crisis Social Law Reforms Old-Age Pension Insurance Ulrich Becker Pre-Crisis Social Law Reforms Old-Age Pension Insurance

Pre-Crisis Social Law Reforms Old-Age Pension Insurance Ulrich Becker Pre-Crisis Social Law Reforms Old-Age Pension Insurance Old age pensions reform act 1992 Invalidity pensions reform act 2000 Amending Law on Retirement Assets 2001 Retirement Assets Law 2001 Contribution Rate Stability Law 2002 Accompanying Budget Law 2003 Pension Insurance Sustainability Law 2004

Pre-Crisis Social Law Reforms Old-Age Pension Insurance Ulrich Becker Pre-Crisis Social Law Reforms Old-Age Pension Insurance Private pensions = second pillar Rising the pension age Adaptation of the “general pension value”

Pre-Crisis Social Law Reforms Old-Age Pension Insurance Ulrich Becker Pre-Crisis Social Law Reforms Old-Age Pension Insurance

Pre-Crisis Social Law Reforms Ulrich Becker Pre-Crisis Social Law Reforms

Adjustment Formula, § 68 SGB VI Ulrich Becker Pre-Crisis Social Law Reforms Adjustment Formula, § 68 SGB VI 1992 - 1999 2001 - 2004 DBE = average amount of gross wage NQ = net quote share of wage RNQ = net quote share of pension RVB = rate of contribution to pension insurance AVA = allotment for private retirement arrangements RQ = pensioners ratio

Financial Crisis and Labour Market Unemployment Benefits Ulrich Becker Financial Crisis and Labour Market Unemployment Benefits 2003/04: so-called ‚Hartz-Reforms‘= 4 statutes on ‚modern services on the labour market‘

Financial Crisis and Labour Market Unemployment Benefits Ulrich Becker Financial Crisis and Labour Market Unemployment Benefits

Financial Crisis and Labour Market Ulrich Becker Financial Crisis and Labour Market Flexibilisation of the Labour Market Insurance and Contributions Introduction of a transition zone (‚Gleitzone‘) 0 – 400 Euro: no contributions 400 – 800 Euro: reductions of contributions Introduction of working-time accounts allowed for reduction of working time between 2008 and 2009 (32 %)

Hiring or recieving company Ulrich Becker Financial Crisis and Labour Market Flexibilisation of the Labour Market Facilitation of Temporary Work Temporary Work (temporary employment agency work) Hiring or recieving company Temporary work agency Labour contract Work

Financial Crisis and Labour Market Ulrich Becker Financial Crisis and Labour Market Flexibilisation of the Labour Market Facilitation of Temporary Work Removal of restrictions Administrative simplification Principle of equal treatment

Ulrich Becker

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings Explanation for the ‚Job-Wunder‘ ?

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings Unemployment Rates

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings Explanation for the ‚Job-Wunder‘ ? A ‚Model‘ for exportation ?

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings

Evaluation and Outlook Findings Ulrich Becker Evaluation and Outlook Findings

Evaluation and Outlook Corrective Measures Ulrich Becker Evaluation and Outlook Corrective Measures statutory minimum wage in 2015 efectiveness of old-age pension insurances

Evaluation and Outlook Ulrich Becker Evaluation and Outlook