Abstract

After WW II, the previously rather rudimentary German social model was developed into an inclusive Bismarckian welfare state that protected the vast majority of the population from life's main risks. In the past 20 years, the social security system has been reorganized at a rapid pace. The hitherto inclusive wage system has been eroded by the deregulation of product markets and the Hartz laws with negative spillover effects for all wage-related benefits of social insurance especially pensions. Therefore the German welfare system has become more exclusive. At the same time, the reform of the traditional German family model has begun with the development of child care and all-day schools and the introduction of the parental allowance. In addition a mandatory long-term care insurance was introduced and the modernisation of dual system of vocational training helped to reduce youth unemployment.