Economists Question Saxony-Anhalt's Work-Linked Citizen's Benefit Scheme
Economy / Finance

Economists Question Saxony-Anhalt’s Work-Linked Citizen’s Benefit Scheme

Economists warn that the proposal by Saxony‑Anhalt’s Minister President Sven Schulze (CDU) to tie the new citizen’s benefit (Bürgergeld) to volunteer work could face significant obstacles.

Joachim Wolff, a labor‑economist at the Institute for Employment Research, told “Die Welt” that the goal should not be to force recipients of job‑directed benefits into voluntary work simply because they are searching for employment and could find paid jobs. He contended that such a requirement would deter people from participating in legitimate job‑seeking activities if they could instead secure regular employment.

Holger Schäfer, a labor economist at the German Institute for Economic Research, agreed that paying transfer benefits only for work “is economically efficient” because it raises the incentive to look for jobs-people would have less free time if the benefit depends on the work performed. However, he highlighted several practical problems. First, suitable job opportunities would have to be created from scratch, and it is not certain that private providers of similar services could not be displaced. Second, the costs of the benefit would be borne by the federal government while the municipality would reap the advantage from the improved well‑being of its residents, creating a perverse incentive for local authorities not to place unemployed citizens into regular employment. Third, past experiments with employment‑generation programs have generally failed to improve integration into stable jobs.

Achim Brötel, president of the German District Parliament and district administrator of Neckar‑Odenwald, pointed to the already existing instrument of so‑called „Arbeitsgelegenheiten”-voluntary, non‑profit work for compensation. “These are not a new tool; counties and cities can use them today” he said to “Die Welt”. He noted that among asylum seekers these activities have increased, providing employability, a meaningful daily structure, and, ideally, a springboard out of social benefit. Brötel added that more decisive measures are needed to demand employment, and that the current regulation requiring such opportunities to be in the public interest and competition‑neutral is “too cumbersome”. He remarked that the legal framework for asylum seekers is already more developed.