Arbeit statt Sozialhilfe

The current German system of social assistance undermines work incentives. In this book, the author investigates how they could be restored by wage or income subsidies, or by moving from a welfare to a workfare-based system which would foster the self-sufficiency of its recipients. He also examines the extent to which the U.S. welfare reform may be used as a blueprint for Germany. When this was first attempted in the Leipzig model, it resulted in vertical fiscal externalities. However, in the context of E.U. enlargement, horizontal fiscal externalities might be induced by welfare-induced migration.