Welfare for the Unemployed in Britain and Germany

Welfare for the Unemployed in Britain and Germany

Who Benefits?

Frances McGinnity

In recent decades, the problem of unemployment has generated fierce political and academic discussion on how national governments should address this issue. This book sheds light on a key debate in unemployment policy – that of whether unemployment benefits should be insurance-based or means-tested. It carefully compares the impact of the British and German benefit systems on poverty, the duration of unemployment and the spread of workless households during the 1990s.

Chapter 3: Welfare for the Unemployed in Britain and Germany

Frances McGinnity

Subjects: economics and finance, labour economics, social policy and sociology, comparative social policy, labour policy


The overall aim of the book is to compare welfare provision and outcomes for the unemployed in Britain and Germany. The purpose of this chapter is to uncover the institutional frameworks with which to interpret the empirical comparison of outcomes conducted in later chapters. This chapter also aims to flesh out the bare bones provided by the typologies of welfare we reviewed in Chapter 1, drawing on these typologies in explaining both historical developments and current provision of welfare. This chapter traces the development of welfare for the unemployed from the beginning of the 20th century until the present day, in the form of cash transfers and measures to assist the unemployed back into the labour market. The material has been chosen with later chapters in mind, and the emphasis is on the main period covered by analysis in this book: 1991–96 for Britain, and 1984–96 for Germany. We do, however, also include a brief historical account, arguing that past policy choices had a considerable impact on subsequent and current structures of provision. After comparing the origin and evolution of benefits for the unemployed in Britain and Germany, we present an overview of the principles of unemployment compensation. We then focus on the 1980s, a period characterised by changes in the welfare systems – particularly in Britain – that have had a big impact on current provision. The next section presents an overview of benefit provision in 1996, comparing in detail the balance of means-tested and insurance bene...

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