Scenarios for a Design of Unemployment Benefits

The task of the present study was to simulate effects on the number of recipients, on the level of subsistence benefits and on the use of the budget for unemployment insurance, as well as on the systems of demand-oriented minimum income support (Bedarfsorientierte Mindestsicherung or social assistance) for different options for structuring new unemployment benefits ("Arbeitslosengeld-Neu"). The concrete scenarios were specified by the politically responsible side, none of them attained the status of an agreed implementation proposal for a new unemployment benefit. The analysis is based on a microsimulation model and includes both the change in the number of beneficiaries and the level of benefits as well as the total expenditure of the proposed system compared to the status quo. The impact of these unemployment benefit variants on the downstream system of demand-oriented minimum benefit (Bedarfsorientierte Mindestsicherung) or social assistance is estimated using a stylised model. The detailed assessment of the effects of options for structuring unemployment insurance carried out here as an example offers the possibility of placing political decision-making on a more objective basis.