Hartz IV reform did not reduce unemployment in Germany

Impact of the Hartz IV reform on curbing unemployment in Germany proved to be exceptionally low 

07.11.2013

The Hartz IV reform of the German labor market has been one of the most controversial reforms in the history of the reunited Federal Republic of Germany. It has been widely seen as the end of the welfare state leading into poverty. At the same time, Germany has been able to reduce its unemployment rate over the last years more than almost any other European or OECD member country. What role did the Hartz reforms, and the Hartz IV reform in particular, play in this success story? A recent publication by Junior Professor Andrey Launov and Professor Klaus Wälde of Johannes Gutenberg University Mainz (JGU) shows that the Hartz IV laws had indeed no noteworthy impact on the decrease of unemployment in Germany. Just in contrast to that, the Hartz I to Hartz III reforms appear to have been more helpful.