Party competition and segmentation of unemployment benefits in Germany

This paper analyzes the impact of party competition on the development of unemployment benefits in Germany. It argues that during welfare state expansion centripetal competition between parties has decreased the segmentation of unemployment compensation into different schemes whereas during welfare state retrenchment centripetal competition has increased benefit segmentation. The paper consists of three sections. First, it reviews the literature on party competition and social policy development. However, party competition has not yet received as much attention in Comparative Welfare State Research as it should, given that it is a central dynamic of the political process. Second, the paper traces the development of unemployment benefit segmentation in Germany after World War II. The concept of segmentation refers here to the differentiation of compensation into different schemes and the differences in generosity between those schemes. Third, the paper analyzes the development of the German party system and how this affected the reforms of unemployment compensation. The competitive dynamic before and after the recent `Hartz´ labour market reforms are presented in more detail. In sum, although the research is still in progress, it shows how under the different economic circumstances of social policy expansion and restructuring the moderate pluralist party system and the centripetal mode of competition that it generates have shaped the distributive impact of unemployment benefit reforms.