Incapacitated or unemployed? Welfare and employment policy - The German approach in an international perspective
Joblessness and Social Inclusion Institute of Employment Research Nuernberg, Germany
International Comparisons and European Integration Institute for Employment Research Nuernberg, Germany
Joblessness and Social Inclusion Institute for Employment Research Nuernberg, Germany
In many European countries there are rising numbers of people, which rely on work incapacity benefits as their main source of income. Germany is an exception with constantly low rates of work incapacity benefit recipients. If one looks at OECD data, the compositions of the ?benefit dependent? populations in Europe differ vastly by benefit category. While France is leading in granting old age pensions before the age of 65, most incapacity or sickness benefits are granted in Denmark and Germany scores top in benefits related to unemployment.
Three causes are commonly mentioned that explain the cross-national variation: demographics, health and institutions. The first argument claims that countries with an older population have higher prevalence of work incapacity benefit receipt. The second claims that differences in physical and mental health explain why incapacity benefits are taken more frequently in some countries than in others. The third relates to incentive effects of the incapacity benefit systems, which significantly increase the uptake of incapacity benefit provisions. Studies provide evidence that internationally highly different incapacity rates cannot be attributed to differences in health status or demographic factors alone but appear to be primarily caused by institutional differences.
The availability of work incapacity and unemployment benefits in Germany depends on the ascription of work ability. Every person that is assessed capable to work at least three hours a day has no access to work incapacity benefits but to qualification or activation schemes that aim at labour market integration. In consequence, those persons remain in the system of labour market benefits. So in Germany the rates of long-term unemployment are relatively high, compared to other countries. While other Europeans are incapacitated, Germans are unemployed.
In the paper we discuss factors that shape the pathways into employment, unemployment or incapacity benefit in Germany taking into account institutional differences in other European countries. Thereby access to medical and vocational rehabilitation schemes, to employment integration support and other governmental initiatives as well as self-ascriptions and individual preferences will be taken into account.