History of German Welfare State

Germany’s Welfare StateFrom Necessity to Crises

Biruk TerrefeJanuary, 2014

German Politics and CultureInstructor: Maximilian Held

What is a welfare state?

“A system whereby the state takes responsibility for the welfare of its citizens, in case of unemployment, illness, old age or poverty.”

Where are we right

now?

Source: DeStatis (2014)

How did we get here?

1794

“The old patriarchal position of the state is clearly defined in” the

Prussian Landrecht”

“Hamburg is credited with […] a poor relief system”

- Rimlinger (1971)

GERMANY

1800s

“ideological predisposed to social protection of the individual,

since this was implicit in the patriarchal social ideal.”

– Rimlinger (1971)

1840s

“If a state failed to solve the social problem raised by

industrialism, it would stand helpless against the ‘solidarity

of misfortune’.”

– Louis Blanc

1850 – 1870

“Iron Law of Wages”

–Ferdinand Lasalle

1880s

“State must take matters in hand ‘not as a matter of charity, but as

a right to support’ ”

– Otto von Bismarck

Industrial accident insurance 1883

Health Insurance 1884

Old age and invalidity bill 1889

1900s

“It was tragic that in the midst of a growing economic crisis, the burden of social insurance

benefits become the issue that triggered the collapse of the

ruling coalition and opened the road to totalitarianism”

– Rimlinger (1971)

1930s

“Hitler turned social insurance into an instrument of economic

and social control”

– Rimlinger (1971)

1953

“Reforms were necessary, even if Germany had won the war.”

– Rimlinger (1971)

“A system whereby the state takes responsibility for the welfare of its citizens, in case of unemployment, illness, old age or poverty.”

1. Unemployment insurance (SGBI and III)

2. Health Insurance (SGB V)

3. Old Age Pension Insurance (SGB VI)

4. Invalidity Insurance (SGB VII and IX)

5. Child support (SCGB VIII)

6. Social Care (SGB XI)

Today

?Old-Age Dependency Ratio

Labor Market Regimes

Increasing Unemployment Benefits

(1) What kind of reforms would be necessary to improve the current welfare system?

(2) “An economy –through its growth rates and labour market dynamics, provides the great majority of people with enough income so that traditional welfare programs can play a minor role.” What do you think?

ReferencesDeStatis. (2014, January 1). Social Budget . Retrieved January 15th , 2014,

from Statistishes Bundesamt :

https://www.destatis.de/EN/FactsFigures/SocietyState/SocialStatistics/

SocialWelfareBudget/Tables/SocialWelfareBudgetFunctions.html

Federal Statistical Office . (2009). Germany's population by 2060 . Wiesbaden:

DeStatis.

Rimlinger, G. (1971). Germany: Out of the Patriarchal Tradition . In G. Rimlinger,

Welfare Policy and and Industralization in Europe, America and R (pp. 89 - 134). New

York, USA: John Wiley & Sons Inc. .

Sapir, André, Globalisation and the Reform of European Social Models, back-

ground document for the presentation at ECOFIN Informal Meeting in Man- chester, Sept.

9, 2005, pp. 1-13.