Daily Süddeutsche Zeitung reported on Thursday that the Federal Employment Agency (BA) and Labour Minister Ursula von der Leyen agree that in 2011, there would be around seven percent fewer recipients Hartz IV long-term unemployment benefit compared with this year.
About 950,000 people who are ending this year on Arbeitslosengeld II long-term unemployment benefits are expected to return to the job market next year, the BA estimates.
The total saving to the government would be about €900 million.
“We plan to be more successful in 2011,” a BA spokesman told Süddeutsche Zeitung.
The government also expects more people who have been out of work for only a short time – and are therefore receiving the more generous Arbeitslosengeld I – will be quickly reintegrated back into the job market.
The BA predicts that 16 percent of people who register with a job agency in 2011 because they are laid off will be immediately placed in a new job. The figure was only 12 percent in 2010.
Such optimism is based on the strong forecasts for Germany's economy and the healthy signs for the job market. The BA research department, the Institute for Employment Research, predicts the average number of people looking for work in 2011 will be 2.96 million.
That would be 280,000 fewer than the 2010 average. The majority, some 170,000, will be people who have only recently been looking for work, while the other 110,000 will be long-term unemployed, the institute predicts.