The Effects of the Means-tested Basic Income Support on the Behavior of Households - an Overview

For some time now, there has been increasing public discussion of a fundamental reform of the social security system in Germany, with demands extending as far as the introduction of an unconditional basic income. On the one hand, numerous points of criticism of the existing system of basic benefits in Germany have been raised. One major reason for this is the interaction of various transfer payments, some of which pursue different distribution and incentive goals. On the other hand, globalization, digitalization, and technological progress present us with major challenges, but also new opportunities. The question arises whether the existing social system is equipped for this and can take advantage of new opportunities. At the same time, the literature has grown in recent years including numerous analyses of the impact of the Hartz reforms and other elements of the existing social system in Germany, as well as partly experimental studies of basic income concepts in other countries. This study provides an overview of the literature and the effects of means-tested basic income on household behavior.